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The state government has decided to use about Rs 6000 crore cash surplus available with Odisha Mining Corporation (OMC) to meet its expenditures as state's own revenue collection and devolution of funds from the Centre has witnessed a declining trend in the current fiscal.
As per a proposal of the finance department, an instrument will be formulated to access the huge cash reserve of the state government undertaking.
“The instrument will be in conformity with the Companies Act, by which the state government can avail the cash from the company. In exchange, the government will commit to make equity investment at the time of launching of new project by the company,” said an official of the mining firm.
Cumulative cash surplus of OMC was Rs 5911 crore by the end of September 2014 quarter. Official sources in OMC said, it will touch Rs 6000 crore in the current fiscal. The company has parked its surplus funds at various public and private sector banks.
OMC has already contributed Rs 500 crore this year in the form of ad-hoc dividend to the state exchequer as the government is reeling under cash crunch. A latest estimate shows the government is projecting Rs 5723 crore shortfall in revenue generation this fiscal, from Rs 40,810 crore estimated earlier, owing to poor mining royalty income, slow rate of tax collection and due to spending cut announcement by the Union government which has affected grants-in-aid.
The mining company has about 33 mines leases with iron ore, bauxite, chromite and manganese deposits and has also applied for coal mines. The state PSU is a gold category firm and has been contributing to many government schemes. It has even lent Rs 1000 crore to state-run power trader Gridco at market determined interest rate, for payment of dues to power generators.
OMC earns profit mainly from auction of mineral resources such as iron ore and chrome ore. It had entered into a joint venture with several mining firms such as Sesa Sterlite (then Vedanta Aluminium Ltd) and Rio Tinto, but the projects never took off due to various reasons.
Recently,it has evinced interest to develop a 5-6 million tonne per annum steel plant in association with NMDC at Keonjhar. However, the project proposal is yet to pass through the state government as both the PSUs are keen on getting 51 per cent stake in the ultra mega steel project.
