Naveen Patnaik finds fault with Centre`s mining policies

Naveen Patnaik criticised the Centre`s mining policies, claiming they have helped large mining firms to "run away with super normal profits".

New Delhi: Chief Minister Naveen Patnaik on Thursday criticised the Centre`s mining policies, claiming they have helped large mining firms to "run away with super normal profits" from mineral-rich less developed states like Odisha.

"These states have not benefited from their rich natural resource endowment.... At present also, mineral rich states have not been able to reap full benefits of their endowments because of distortions in, and delayed implementation of , mineral royalty policies," Patnaik said in his speech at the National Development Council meeting.

Accusing the Ministry of Mines of "dithering" about revision of the royalty structure, he said royalty from mineral resources which could have funded higher plan sizes and triggered development has been kept persistently low in spite of several requests made by him in the past.

Due to prolonged efforts by mineral bearing states, the royalty rates have been shifted to an `ad valorem regime` but the impact of this change has been dented by an artificially low price of minerals as determined by the IBM (Indian Bureau of Mines), Patnaik said.

He said this matter has been taken up with the Centre on a number of occasions but the results have not been encouraging.

"Mining companies have run away with super normal profits while the Ministry of Mines has been dithering about revision of the royalty structure. Surprisingly, the fact that super normal profits are being earned by the mining companies is visible and evident to almost everyone except possibly to the Ministry of Mines!," Patnaik said.

Noting that the powers for allocating and regulating most natural resources are vested with the Centre, he said the people of the mineral rich states rightfully deserve to benefit from their resource endowments.

"For example, the states cannot tax minerals directly within the framework of the central laws. The states cannot even levy sales tax on iron ore and other minerals at a rate higher than two percent since bulk of these minerals are exported to other states. Nor can the states auction the lease rights for mining to capture the economic rent from these scarce natural resources," Patnaik said expressing his concerns.


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