Ministry plans to hold States responsible for loss in royalty revenue
NEW DELHI: With the Bellary mining story hitting the headlines, Union Minister for Mines B.K. Handique on Wednesday turned the heat on Chief Ministers.
In a letter to individual Chief Ministers, he lamented inaction on their part in respect of illegal mining and sought their “personal intervention” to ensure “effective control and supervision of the mining sector in your State.”
The letters went out even as the Ministry held a mid-term appraisal meeting with the Planning Commission, at which it discussed the outlines of a broad plan to curb illegal mining. Specific proposals included holding individual States responsible for losses in royalty revenue due to illegal mining.
The letter said the Central advisory had become necessary because “recent events in various parts of the country have led to a virtual loss of credibility in the management of the sector.” Further, “I am sure you will agree with me that incidents of illegal mining have to be taken very seriously and stringent action initiated against the guilty.”
Recalling previous correspondence and meetings with State representatives on the subject, the Minister said: “I am pained, however, to point out that even after repeated advisories and offer of support of the Central government wherever needed, there is not enough response from the State governments.”
At the meeting with the Planning Commission, Ministry officials pointed out that the Centre had recently revised royalty rates, which ought to “substantially increase” royalty accruals to the States. But since the revenue-earning capacity of the States was affected by their “ineffectiveness” in curbing illegal mining, they should be held accountable for the losses in royalty revenue.
The Ministry suggested that linking the losses in royalty revenue to State funding would act as a “serious financial disincentive” which would correct the current status of “ineffective and poor collection of royalties” from mining.
On November 27, Mr. Handique held a meeting with State Secretaries and drew up a plan of action for them. The recommended measures included using satellite imagery to locate illegal mines; monitoring price increases in mineral ore; leveraging market intelligence to zero in on mines showing heightened activity; keeping tabs on truck movement; using bar-codes and holograms to prevent fudging of transport permits; and making it compulsory for user industries to check payment of royalty before purchase of mineral ores.