Orissa hit by royalty freeze on Ch, Mn

The Centre's decision to revise the royalty on non-coal major minerals barring chrome and manganese has hit Orissa the worst as both the excluded minerals are abundant in the state.

About 98.5 per cent of the country's chrome deposit and 32 per cent of the manganese deposit are found in Orissa.

"Hence taking them out of the mineral royalty revision list is unfortunate", says Prafulla Ghadei, finance minister of the state.

Orissa expected to get Rs 30 crore additional revenue per annum from mineral royalty revision.

As against this it will now receive only Rs 12.54 crore, thus resulting in a net loss of Rs 17.46 crore.

The state has decided to appeal to the Centre demanding revision of royalty on chrome and manganese.

Ghadei admitted Orissa was rich in other minerals like bauxite, graphite, iron ore, dolomite and coal as well.

But chromite and manganese were the most abundant minerals in the state, and the Centre's decision would jeopardize the state's finances if income from these could not be raised.

"This is deplorable and highlights yet another injustice by the Centre", he added.

The state had lost revenues earlier as well, owing to non-revision of royalty on coal in time.

The Orissa government had alleged some time ago that it suffered a loss of Rs 750 crore due to non-revision of coal royalty between 1997 and 2002.

The recommendation of the Eleventh Finance Commission to the Centre for compensating the loss had not been honoured, the government added.

This along with the new decision on mineral royalty would aggravate the fiscal problems faced by the state, the minister said.

The Sarakaria Commission and National Development Council had recommended revision of royalty on major minerals every three years. The last revision of coal royalty was done in 2002 after a gap of eight years. The delay in royalty revision for other minerals varied from three to five years

Explaining its fiscal difficulties, the state government recently submitted a memorandum to the Twelfth Finance Commission demanding timely revision of royalty on coal and other minerals and compensation for the delay in revision for previous years.