Says about 58 per cent of the iron ore produced in the country is exported

In the midst of the illegal mining controversy, Chief Minister B.S. Yeddyurappa on Saturday urged the Centre to permit the State to go ahead with the ban on export of iron ore from the State.

“Pending any final decision by the Centre, Karnataka may be permitted to go ahead with the ban on export of iron ore from the State,” he said.

Mr. Yeddyurappa was participating in the National Development Council meeting in New Delhi to consider and approve the Mid Term Appraisal document of the 11th Plan.

He urged the Centre to ban export of iron ore and find ways to create value addition for natural resources within the country. He appealed to the Centre and other States to encourage a value addition by banning the export of iron ore.

“Unless certain curbs are placed on export of iron ore, undue exploitation and illegal mining are likely to continue,” he said. There was an urgent need to arrest the trend of export of nearly 58 per cent of the iron ore extracted in the country. He said: “We have to find ways and means to create value addition within the country itself rather than blindly exhaust our natural resources through indiscriminate exports.”

In his 31-page address, Mr. Yeddyurappa said at the recent Global Investor's Meet seven major steel companies had entered into Memorandum of Undertaking (MoU) with the State Government to set up integrated steel plants with a capacity of 40 million tonnes per annum. Even if some of these plants materialised within the next three or four years, the quantity of iron ore fines generated in the State could be fully utilised within the State itself, he said.

He said the current level of production of iron ore in the State was around 49 million tonnes — 70 per cent in the form of fines and 30 per cent in the form of lumps. Karnataka was the first State to introduce a new Mining Policy by which fresh leases and renewals of existing mining leases in respect of iron ore were given only if there was value addition within the State, he said.

While supporting the need for fiscal prudence in managing the government borrowings in a sustainable manner, he said the proposed “one size fits all” approach to fiscal consolidation by mandating uniform 3 per cent fiscal deficit should be revisited. As Karnataka could effectively absorb more debt, it should not be denied an opportunity to invest in its future by using the additional borrowings in the growth accelerating infrastructure, he said.

Welcoming the Centre's assurance on the compensation for a limited period on the impact of Goods and Services Tax (GST) on State's resources, the Chief Minister said the finally selected GST rate should not compromise ability of the States like Karnataka with high tax effort.

Noting that 91 per cent of the expenditure on the centrally sponsored programmes was on 20-odd schemes only, he said smaller schemes might be discontinued and the resources transferred to the States.

He urged the Centre to desist from insisting on unilateral changes in the agreed MoU on the Bangalore Metro project. The cost and time overruns were often beyond the control of the State Government and such conditionalities were unreasonable, he said.

He said the Government was thinking of bringing out ‘Karnataka Agri-Business Development Policy' during this year in order to attract more investment in agri-processing and value addition sectors through PPP mode, including promotion of agri-logistic parks.