Royalty on minerals to states to swell 41% to 13,274 cr

Royalty to Jharkhand will increase from Rs 645.91 crore to Rs 944.38 crore while Chhattisgarh revenue will up to Rs 1,976 crore

Mineral-rich states like Odisha, Chhattisgarh and Jharkhand will be the biggest beneficiaries of hike in royalty rates by the Union Cabinet, chaired by Prime Minister Narendra Modi yesterday.

The royalty to mineral rich States would increase by 41% to Rs 13,274 crore from Rs 9,406 crore (2011-12) after the much-awaited decision yesterday, an official statement said.

"With this decision, the royalty to mineral rich States would increase by 41% from Rs 9406 crore (2011-12) to Rs 13,274 crore (estimated). The Chief Ministers of these states have been repeatedly pressing for this issue," the official statement said today.

"The biggest beneficiary states are those having sizeable tribal population," it said, adding, the royalty to Jharkhand would increase from Rs 645.91 crore to Rs 944.38 crore while Chhattisgarh revenue will up to Rs 1,976 crore from Rs 1,346.31 crore.

Odisha royalty will jump to Rs 4,880 crore from Rs 3,249.54 crore while that of Jammu & Kashmir will increase to 1.97 crore from Rs 1.59 crore and Maharashtra's revenue on this account would swell to Rs 177.29 crore from Rs 136.38 crore, the statement said.

The Cabinet Committee on Economic Affairs had yesterday approved the revision of rates of royalty and dead rent of all major minerals other than minor minerals, coal, lignite and sand for stowing, as per provisions of Mines and Minerals (Development and Regulation) (MMDR) Act, 1957.

It also approved the application of these rates in all the States/Union Territories (UTs).

"Since 1987, the benefit of revised rate of royalty is not being extended to the state of West Bengal as it levies a cess on mineral bearing lands and this matter is still being agitated in various courts," it said.

However, the Study Group has recommended that the revised rates may now be applied to all the States/ UTs (including West Bengal) as levy of cess by West Bengal is being made under a different statute and does not operate as a legal ban on the proposed revision, the statement said.

The CCEA has accepted this recommendation with the result that West Bengal will receive the benefit of the revised rates of Royalty, the statement added.

A mine leaseholder has to pay either royalty on extracted minerals or dead rent for leased area.

The Second Schedule of the MMDR Act covers 50 major minerals and a separate category of all other minerals.

As per section 9(3) and 9A(2) of the Act, the Government of India may amend and notify the rates of royalty and dead rent for the minerals listed in this Schedule. Such revision can be done not more than once in every three years.

The last revision of rates was notified in August 2009 and the Ministry of Mines had constituted a Study Group which consulted all stakeholders and gave its recommendations on June 2013, which was largely accepted by the government.