New Mines Bill likely to be placed before Cabinet tomorrow

The new Mines Bill that provides for sharing of 26% profit by coal miners and an amount equivalent to the royalty payment by other miners with the project-affected people, is likely to come up before the Cabinet tomorrow.

"The Mines and Mineral Development and Regulation Bill 2011 is scheduled to be placed before the Cabinet tomorrow," a source privy to the development said.

The Bill, approved by a ministerial panel headed by Finance Minister Pranab Mukherjee, was earlier supposed to be tabled in the monsoon session of Parliament.

Mines Secretary S Vijay Kumar earlier this month said the Ministry now intends to introduce the new legislation in the winter session and has sent the Cabinet note on it to Cabinet Secretariat and other concerned ministries.

"It will soon come up before the Cabinet for approval," he had said.

In July, the ministerial panel headed by Finance Minister Pranab Mukherjee had approved the draft Bill, which provides 26% profit-sharing with displaced people by coal mining companies.

For the non-coal miners, the new law will provide for payment to the displaced an amount equivalent to royalty paid to the state government.

The draft MMDR Bill, 2011, seeks to replace more than 50-years-old law under the same name.

It also proposes to set up a district development fund where the money accumulated from the 26% profit sharing by coal miners and an amount equivalent to 100% of royalty for non-coal miners, will be deposited and spent on local population and area development.

Apart from compensating the displaced people through profit-sharing and royalty, the draft Bill also proposes that mining firms bear a combined cess up to 12.5% on the royalty paid to states and the Centre.

This includes 10% cess to state governments on the royalty payment, while 2.5% levy will be charged by the Centre as cess.

However, industry chambers like Ficci and Assocham are opposing the draft Bill, saying that if implemented this would make India the most taxable country for the miners.

Seeking a revision of the draft proposal, Ficci in its representation to the Prime Minister said that the proposal would lead to a scenario where total payable tax on coal would be over 61%, making the industry unattractive.

It has also projected that taxes on iron ore mining would be around 55%, while for bauxite it would zoom to 110%.