 "Mining revenue dips 3% in April-Aug")
The state witnessed slump in mining revenue collection during the first five months of the current financial year, as restrictions and slowdown in demand affected output of minerals.
Between April and August, the state government collected Rs 2,190 crore as mining revenue, comprising of mineral royalty, dead rent and other non-tax charges, which was less than Rs 2,256 crore collected during the same period a year ago. The mining royalty collection has come down by three per cent in April-Aug compared with the previous year period.
One of the major reasons for fall in mining royalty is the restrictions imposed by the state government on miners that has taken a toll on output, said a trade source.
Through its resolution dated December 5 last year, the state steel & mines department had made it mandatory for mine lessees without end-use plants, to sell at least 50 per cent of their extracted iron ore to state based consuming industries.
However, with the state production of iron ore surpassing the total annual need of local steel units, large stock of fines were piled up at different mining locations.
Data available with state mines directorate shows the stock of iron ore fines in the state by the end of August stood at 46.52 million tonne (mnt), with Joda circle having the highest inventory of 27.66 mnt followed by Koira 12.80 mnt. About 7 mnt iron ore lumps are also lying at different mines.
Trade sources said the fines stock was around 44 mnt in June and this has gone up by two million tonne in two months’ time, indicating lesser demand for fines inside the state.
“The large unsold stock of minerals has taken up a sizable portion of storage area, forcing miners to curb production as they do not have sufficient place to stack the material,” said an official of large iron ore mining company.
The drop in mining revenue collection can also be attributed to slowdown in mineral exports too, pointed out another trade source.
“The state government collects 10 per cent of royalty over selling price of iron ore. However, with less than expected export orders , the government is getting lower revenue on prices of mineral sold in domestic markets,” the source added.
The miners sell iron ore fines for export at Rs 2,200 per tonne, while in domestic markets, the rate hovers around Rs 1,500 a tonne, thereby affecting royalty collection.
With a dip in collection from mineral sector, the state may face a shortfall in non-tax revenue collection during the current fiscal. In 2013-14, Orissa has projected Rs 17, 605 crore in tax revenue and Rs 6, 850 crore in non-tax revenue.
The latest position on collection of state tax revenue and non-tax revenue as of end August reveals that the government has collected Rs 8,627 crore of total revenue out of which Rs 5,889 crore is tax revenue.
The non-tax revenue collection has dropped to Rs 2,738 crore by the end of August, compared with Rs 2,763 recorded in the year ago period.
The transport sector, which is linked to mineral demand in the state, also experienced a fall of 14 per cent in tax collection. Collection of Motor Vehicle (MV) tax, which was Rs 306 crore by the end of August, 2012, came down to Rs 264 crore during the first five months of 2013-14.
However both commercial tax and tax from excise registered growth, with streamlining of tax collection procedures, officials said.
Collection of commercial tax registered 12.7 per cent growth at Rs 3,727 crore by August 2013. This was Rs 3,307 crore during the corresponding period of 2012-13. Similarly, excise revenue collection registered 16 per cent growth during the period at Rs 594 crore, which was up from Rs 510 crore collected in the year ago period.
Between April and August, the state government collected Rs 2,190 crore as mining revenue, comprising of mineral royalty, dead rent and other non-tax charges, which was less than Rs 2,256 crore collected during the same period a year ago. The mining royalty collection has come down by three per cent in April-Aug compared with the previous year period.
One of the major reasons for fall in mining royalty is the restrictions imposed by the state government on miners that has taken a toll on output, said a trade source.
Through its resolution dated December 5 last year, the state steel & mines department had made it mandatory for mine lessees without end-use plants, to sell at least 50 per cent of their extracted iron ore to state based consuming industries.
However, with the state production of iron ore surpassing the total annual need of local steel units, large stock of fines were piled up at different mining locations.
Data available with state mines directorate shows the stock of iron ore fines in the state by the end of August stood at 46.52 million tonne (mnt), with Joda circle having the highest inventory of 27.66 mnt followed by Koira 12.80 mnt. About 7 mnt iron ore lumps are also lying at different mines.
Trade sources said the fines stock was around 44 mnt in June and this has gone up by two million tonne in two months’ time, indicating lesser demand for fines inside the state.
“The large unsold stock of minerals has taken up a sizable portion of storage area, forcing miners to curb production as they do not have sufficient place to stack the material,” said an official of large iron ore mining company.
The drop in mining revenue collection can also be attributed to slowdown in mineral exports too, pointed out another trade source.
“The state government collects 10 per cent of royalty over selling price of iron ore. However, with less than expected export orders , the government is getting lower revenue on prices of mineral sold in domestic markets,” the source added.
The miners sell iron ore fines for export at Rs 2,200 per tonne, while in domestic markets, the rate hovers around Rs 1,500 a tonne, thereby affecting royalty collection.
With a dip in collection from mineral sector, the state may face a shortfall in non-tax revenue collection during the current fiscal. In 2013-14, Orissa has projected Rs 17, 605 crore in tax revenue and Rs 6, 850 crore in non-tax revenue.
The latest position on collection of state tax revenue and non-tax revenue as of end August reveals that the government has collected Rs 8,627 crore of total revenue out of which Rs 5,889 crore is tax revenue.
The non-tax revenue collection has dropped to Rs 2,738 crore by the end of August, compared with Rs 2,763 recorded in the year ago period.
The transport sector, which is linked to mineral demand in the state, also experienced a fall of 14 per cent in tax collection. Collection of Motor Vehicle (MV) tax, which was Rs 306 crore by the end of August, 2012, came down to Rs 264 crore during the first five months of 2013-14.
However both commercial tax and tax from excise registered growth, with streamlining of tax collection procedures, officials said.
Collection of commercial tax registered 12.7 per cent growth at Rs 3,727 crore by August 2013. This was Rs 3,307 crore during the corresponding period of 2012-13. Similarly, excise revenue collection registered 16 per cent growth during the period at Rs 594 crore, which was up from Rs 510 crore collected in the year ago period.