Naveen to call on Union coal & UD ministers today

With Orissa Chief Minister Naveen Patnaik scheduled to meet the Union coal minister Sriprakash Jaiswal on Monday, talks relating to revision of coal royalty are likely to figure high on the agenda.

“I’m leaving for New Delhi and I’ll be meeting the Union coal minister Sriprakash Jaiswal and Union minister for urban development Kamal Nath on Monday. I’ll raise various demands of the state during my meeting with the coal minister”, Patnaik told reporters here.

It may be noted that the Chief Minister had recently sought the intervention of the Prime Minister Manmohan Singh on the issue of revision of coal royalty.

He had stated that the price on which royalty is charged should relate to the market price of the relevant grade of coal and not to the notified price declared by Coal India Ltd (CIL).

Patnaik has suggested that a system of arriving at the market price for any grade of coal can be formulated by the Ministry of Coal. He has argued that this will not have any substantial impact on the electricity tariff in the country as coal is being supplied to the power plants at a heavily subsidized price (notified price of coal).

Presently, the royalty on coal is linked to the coal and the basic notified price of coal fixed by CIL. Patnaik has pointed out that both these elements (grade and notified price) for power grade coal (E, F and G varieties) are very low. Consequently, the amount payable to the state government is also very low and is inadequate for taking up the required measures to mitigate the adverse impact of mining, particularly the practice of open cast mining.

He has also demanded that the state should be entitled to compensation in case of delay in revision of the royalty rate.

"While a study group has been formed in the Ministry of Coal for revision of royalty on coal, the enhancement is yet to come. As a result, Orissa is incurring a huge loss in terms of royalty", Patnaik has stated in his letter to the Prime Minister dated February 22 this year.