State may join hands with Centre for beach sand mining

Government hopes to mop up around ₹5,000 cr. through joint venture

Shoring up revenue: The proposal is in line with the electoral promise of the AIADMK. File

The Tamil Nadu government, which is struggling to neutralise its revenue deficit of around ₹12,000 crore, is mulling implementation of a joint venture project with the Central government for mining and selling beach sand minerals.

As per the proposal, Indian Rare Earths Limited (IREL), which comes under the administrative control of the Department of Atomic Energy, may be roped in for the purpose. Tamil Nadu Minerals Limited (TAMIN), a 39-year-old organisation of the State government, is likely to be the other agency. The proposal has been prepared in the wake of an electoral promise to this effect made by the All India Anna Dravida Munnetra Kazhagam during the Assembly polls last year, an official in the Department of Geology and Mining says.

In June 2016, the then Governor K. Rosaiah told the Legislative Assembly that the government would undertake the sale of beach sand minerals directly, apart from formulating a new granite policy. The operation of mining of beach sand minerals has remained suspended since August 2013.

In the last six months, authorities in Tirunelveli and Thoothukudi districts have taken action against those indulging in “illegal storage, transportation and export of the minerals”.

Another official says that a conservative estimate reveals that at least ₹5,000 crore can be netted annually. But, he points out that instead of creating any joint venture company, the function of mining can be entrusted with any agency, for which transaction cost will have to be paid by the government. The sale of minerals can be carried out by the government. This will help avoid payment of income tax by the proposed joint venture company in the event of the company selling the minerals and earning profits.

River sand mining

Besides, the government is planning to streamline the sale of river sand. It has obtained the approval of the State Environment Impact Assessment Authority for opening seven fresh quarries.

An official release which announced this did not furnish the number of quarries which had been in operation. Last week, an official of the Public Works Department (PWD) said 11 quarries were being operated manually.

The release said that at the government’s sand sale depots, debit or credit cards would also be accepted shortly towards payment. The patrolling of officials of the Revenue and Police departments would be “intensified,” the release added, adding that the PWD would employ more people for the sale of river sand.

The official said the sale of river sand, if done effectively, would fetch another ₹5,000 crore.

In the final analysis, the proposed mobilisation of ₹10,000 crore should provide succour to the government, which has also been hit by the decline in the sale of liquor following the closure of bars and retail outlets on highways. In April alone, the revenue through the sale of liquor went down by nearly ₹1,300 crore. Against the normal monthly earnings of ₹2,000 crore, the revenue was around ₹700 crore. Unless the government finds alternative sources of revenue, it will be affected very badly as it has to implement sooner or later the pay hike for employees, the official adds.