Oil, Ongc Protest Against Assam Rent Hike

Oil India Ltd (OIL) and the Oil and Natural Gas Corporation (ONGC) are up in arms over Assam's proposal to hike the rent for mining areas leased by the two companies.

They have pointed out to the state government that the land leased by them has been reclassified as industrial land. The reclassification has, however, not been done for other industries. This, according to the two oil companies, is discriminatory.

The Assam government had in 1989 fixed a flat rate of surface rent at Rs 747 per hectare per year for mining lease areas held by ONGC and OIL in the state. The surface rent was fixed in terms of Rule 13 (2) (b) of the Petroleum and Natural Gas Rules 1959, which, inter alia, states that "surface rent ... not exceeding the land revenue and cesses assessed or assessable on the land ... shall be payable."

 

As the proposed rate was very high compared to the existing surface rent and the prevalent land revenue rates, the state government was asked by the petroleum ministry to indicate the rationale by which it had arrived at the proposed rate.

The state government, meanwhile, directed the deputy commissioners of Dibrugarh and Sibsagar to reclassify land used by ONGC and OIL as industrial sites and reassess land revenue at rates applicable to the highest class of land. The petroleum ministry believes that this was done to re-fix the rent at Rs 747 per hectare per annum.

Now the state government has approached the ministry with a proposal for hiking the surface rent to Rs 1567.16 per hectare per annum in Sibsagar district and Rs 5597 per hectare per annum in Dibrugarh district.

OIL has pointed out that a major portion of its land holding is in rural areas where land revenue is Rs 0.77 per bigha, whereas the Assam government proposes to raise the land revenue to Rs 750 per bigha. As per Section 11 of the Assam Land Revenue Reassessment (Amendment) Act, 1990, enhancement of land revenue is limited to five times only.

OIL has also said the disparity in the proposed enhancement of land revenue for Dibrugarh district (Rs 750 per bigha) and Sibsagar district (Rs 200 per bigha) is too much. In fact, land is cheaper in Dibrugarh than in Sibsagar.

According to OIL, there is no provision in the Assam Land Revenue Reassessment Act to reclassify any rural land as industrial site. As per Section 15 of the Act, only urban land can be reclassified as industrial sites. Oil India's operations are mainly confined to rural areas.

ONGC has pointed out to the state government that all the sites being used by it, irrespective of their location, have been classified as first class trade site (industrial class).

ONGC has sought revision of this classification so that drill sites and installations in rural areas should not attract high land revenue.