Large scale mine suspension

Shah panel seeks impact on Odisha's economy

The Justice M B Shah Commission of enquiry probing into allegations of large scale illegal mining activities in Odisha has sought a detailed response from the government on the impact of suspension of scores of mine leases on the state's economy.

“The panel chairman- Justice M B Shah has wrote to the state chief secretary, seeking the government's views on the impact of suspension of a large number of mines on the overall economy of the state. With just a little over one-fifth of mines operating, it is bound to have a cascading effect on the economy as a whole apart from hurting mining revenue collection”, a senior government official told Business Standard.

Following the mines department's clampdown to curb irregularities in mining activities, only 129 of a total of 600 mining leases in the state are currently operational. While 240 mines have been suspended on account of lack of statutory clearances, 140 others have been temporarily discontinued. The steel & mines department has also terminated 41 mine leases while not renewing even a single expired lease.

More mines were staring at closure with the state government tightening the noose on errant miners.

The stern action on mining irregularities has already impacted revenue collection from the mining sector. Mining revenue collection in the April-September period at Rs 2612.52 crore fell short of the targeted Rs 2897 crore by 10.88%. The collection is not even half of the ambitious target of Rs 5700 crore set for this fiscal.

The mining department has been consistently missing revenue collection target since April this year, fuelling concerns that the target for 2012-13 may not be met.

Mining revenue is the single biggest contributor to the state's non-tax revenue base. It also accounts for nearly a quarter of the state's overall revenue collection.

The suspension of mines has also deepened the raw material crisis for the end-use industries. Sponge iron plants and steel makers in the small and medium scale who were operating without mining leases have been hit hard.