An expert group of the Mines Ministry will hold its first meeting this week to review the royalty rates, due for revision next year, for all major minerals other than coal, lignite and sand.
The 17-member study group, which will submit its report in six months, will not only take into account the present Act governing royalty, but also the new draft mines law -- Mines and Mineral (Development and Regulation) (MMDR) Bill which is likely to be tabled in the winter session of Parliament.
"The first meeting of the Study Group constituted under the chairmanship of Additional Secretary (Mines), Sanjay Srivastava regarding revision of royalty rates and rates of dead rent for minerals [other than coal, lignite and sand for stowing] has been convened here on October 21," a Mines Ministry official said.
There are 51 minerals prescribed in the second schedule of the MMDR Act 1957 and the rates vary from mineral to mineral. The royalty on iron ore is 10% at present.
Mines Secretary S Vijay Kumar had said earlier that the group will not only review the royalty rates based on existing Act, but will also recommend royalty as per the new mines Bill and the mechanism for its computation.
The committee will also recommend royalty as per MMDR Bill, 2011, taking into account the liabilities on the lease holder, Kumar had said.
The proposed new Mines law provides that the coal miners share 26% of the profit and others an amount equivalent to royalty amount with the project-affected people.
The next upward revision in royalty rates is due in August 2012. Rates are revised every three years and the last revision was done with effect from August 13, 2009.
Royalty is a tax levied by the government on miners in lieu of transfer of ownership rights of mines. While the government views it as a source of revenue, industrialists look at it as part of production costs.
The study group comprises 15 members and has Director, Mines as its as convener.
The members include industry representatives like Secretary General, FIMI, Director General, Confederation of Indian Industry, Secretary General, FICCI and Secretary General, ASSOCHAM besides Controller General, Indian Bureau of Mines.
Besides, Mines Secretaries of Jharkhand, Karnataka, Orissa, Chhattisgarh and Rajasthan have been inducted in the Group as members. Representatives of the Ministries of Finance, Coal, Steel, Atomic Energy, Government of India are also members of the group.
The central Government has been vested with powers under MMDR Act, 1957 to enhance or reduce the rate at which royalty should be payable in respect to any mineral.
