Odisha’s royalty collection in the financial year 2015-16 remained at Rs. 5569.95 Crore with share of coal and non-coal royalties contributing to 29.22% and 62.50% respectively. During this year, the state received total collection of Rs. 516 Crore from non-coal minerals and 430 crore from Coal minerals in respective DMFs (5 districts).
Off budget or extra budgetary resources like District Mineral Foundation Trust fund and OMBADC for specific scheduled areas in the state contribute 8.38% to the total programme budget of the state. There is a ceiling of Rs. 8000 Crore for PSU and off Budget Programme expenditure. Out of this, OMBADC (₹2,150 crore) and DMF (₹665 crore) are employed in convergence mode for piped water supply in 8 mineral bearing districts. This means almost 19% of the budget for Drinking Water Supply is allocated from these two funds. This extra budgetary provision will be disbursed to specific schemes and programmes formulated by the concerned departments and there is no mechanism to understand. Read More
Section 6.5.1 Royalty and contribution towards National Mineral Exploration Trust, District Mineral Foundation Fund on sized coal short realised
Non-inclusion of sizing charges in the Run-of-Mine (ROM76) price of coal during assessment of royalty resulted in short levy of Rs.124.26 crore. Moreover, contribution towards District Mineral Foundation (DMF) fund and National Mineral Exploration Trust (NMET) fund of Rs.37.28 crore and Rs.2.49 crore respectively were short realised.
Section 9 of the Mines and Minerals (Development and Regulation) Act 1957 (MMDR), provides that the holder of a mining lease shall pay royalty in respect of any mineral removed or consumed by him from the leased area at the rate specified for that mineral in the Second Schedule. Under Rule 64B(1) of the Mineral Concession Rules 1960, in case processing of ROM mineral is carried out within the leased area, royalty shall be chargeable on the processed mineral. As per Ministry of Coal notification77 (May 2012), royalty on coal is leviable at the rate of 14 per cent ad valorem on price of coal as reflected in the invoice excluding taxes, levies and other charges. Further, sizing charges78 for coal, when the top size is limited to 100 mm was Rs.79 per tonne (up to 31 August 2017) and thereafter Rs.87 per tonne as notified by the Coal India Limited. Further, under amended (2015) provisions of MMDR Act, the holder of a mining lease, shall pay to the NMET, a sum equivalent to two per cent of the royalty paid and to the DMF, a sum equivalent to 30 per cent of the royalty paid under intimation to the concerned Circle Mining Office. The DMF was constituted by the State Government in 2015, under ‘The Odisha District Mineral Foundation Rules, 2015’.
During test check (April 2018 to March 2019) of records like assessment files and monthly returns on production and dispatch in the offices of DDM Rourkela, DDM Sambalpur and DDM Talcher, it was observed that the DDMs assessed royalty on coal dispatched at the prescribed rate of 14 per cent of the price of ROM coal. Sizing charges, however, were not included in the price of the coal though the same were collected by the lessees from customers and reflected in the sale invoices.
It was noticed that the lessee, Mahanadi Coalfields Ltd. had processed and dispatched 1,059.59 lakh MT of sized coal of less than 100 mm size from 15 coal mines during the year 2017-18 and paid royalty at the rate applicable to ROM coal. Thus, non-inclusion of sizing charges in the price of the coal in assessment resulted in short levy of royalty worth 124.26 crore. This also resulted in short realisation of contribution to DMF fund of 37.28 crore (30 per cent of 124.26 crore) and contribution to NMET of 2.49 crore (two per cent of 124.26 crore). Government, in its reply (February 2020), stated that demands had been raised by all the three DDMs. However, in six cases pertaining to DDM Talcher and Rourkela, the lessees have filed appeals before Revisionary Authority against the demand notice. Read CAG Report 2018-2019
Documents related to Odisha District Mineral Foundation
Only 5 districts reported collection of funds into District specific DMFs constituted so far
Maximum contribution (24%) in the month of March 2016 (end of financial year 2015-16)
Keonjhar & Sundergarh stand out as major receipients of contribution in District Mineral Foundation from minerals other than coal & lignite. These both districts contribute almost 93% (Rs. 479 Crore) of overall fund accumulated in DMF as of September 2016.
Angul District received maximum contribution to the DMF fund from coal mining followed by Jharsuguda. Angul & Jharsuguda are two contiguous districts majorly having coal deposits and mining of coal by Mahanadi Coalfields Limited (MCL) in the Ib Valley
Sambalpur has one coal mine i.e. Talabira – I Coal mine which was earlier with Hindalco but after Coal auctioning, the mine is now with GMR Chhattisgarh Energy Limited
Maximum contribution (23%) in the month of March 2016 (end of financial year 2015-16)
Total 39% of sanctioned amount is allocated for water related projects. This hints that Government did not spend all these years in mining areas for these basic needs. It is now that such huge amounts are being pushed for such projects. There is nothing for the affected communities which they can directly get relief, it is rather an old practice by bureaucracy in a new format of schemes. If one looks at the Annual Plan for Keonjhar District, it is the Line Departments who are the proposers of projects under DMF. Such projects once identified will be placed before the Executive Committee for scrutiny and preparing the priority list before approval of Trust. The project director, DRDA happens to be the Chief Executive of the Trust to whom all such proposals are sent.
Remaining Carbon Budget
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