Centre raises royalty to states on select minerals by 41%

The centre today announced a 41-per cent increase in royalty / dead rent on certain minerals (except coal, lignite, sand for stowing and minor minerals), payable to respective states where the mining leases are situated.

The rate revision, approved by the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, will benefit all mineral-rich states, including Chhattisgarh, Jammu & Kashmir, Jharkhand,  Maharashtra and Odisha, whose combined royalty from minerals will go up to an estimated Rs13,274 crore from Rs9,406 crore at present.

The revision will raise Odisha's annual royalty revenues from mining operations to Rs4,879.92 crore from Rs3,249.54 crore at present, while Chhattisgarh's mineral royalty earnings will go up to Rs1,976.02 crore from Rs1,346.31 crore, Jharkhand's to Rs944.38 crore from Rs645.91 crore, Maharashtra's to Rs177.29 crore from Rs136.38 crore and Jammu and Kashmir's to Rs1.97 crore from Rs1.59 crore at present.

Besides, the revised rates would also be applicable to West Bengal where the state government levies a cess under a different statute.

The CCEA, chaired by the Prime Minister Narendra Modi, on Wednesday 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, an official release said.

Since 1987, West Bengal has not benefited from revision in royalty rates on minerals as the state government levies a cess on mineral bearing lands and this matter is still being challenged in various courts.

However, a study group appointed by the government has recommended that the revised rates may now be applied to all the states and union territories (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 CCEA has accepted this recommendation with the result that West Bengal will receive the benefit of the revised rates of royalty.

A mine leaseholder has to pay either royalty on extracted minerals or dead rent for leased area. The MMDR Act covers 50 major minerals and a separate category of all other minerals. It provides for revision of royalty and rental rates once in every three years.