Even as three years have already passed since May 2015 when the Union Government had to revise coal royalty as per guidelines, Odisha’s repeated requests for increasing the royalty still remains unheard.
During three years, the State has suffered a lot due to non revision of coal royalty, said a Finance Department official. The royalty on coal was last revised on 10 May, 2012 and hence the revision is due from May 2015.
Recently, the State Government urged the Ministry of Coal to revise the royalty on coal immediately without further delay. The rate of royalty, which is 14 per cent at present, is revised every three years, said an official statement.
Besides, the Government has also urged the NITI Aayog to take up the matter with Union Government as Aayog’s Vice-Chairman Rajiv Kumar is sorting out pending issues.
During his recent visit to Odisha, Chief Minister Naveen Patnaik and Chief Secretary AP Padhi also pressed for royalty revision. In its pre-Budget memorandum, the State had also urged Minister Finance Arun Jeitley to reflect higher royalty for coal in the Union Budget.
Odisha, being a major coal bearing State, face adverse effects of coal mining such as displacement of people, environment pollution and reduction in forest area. The present 14 per cent royalty on ad-valorem basis is inadequate to mitigate these adverse effects, particularly on the open cast mining of coal.
The accrual of royalty from low grade coal (F-Grade-pre-classified) was less than the royalty accrued from this grade at the pre-revised hybrid formula. The State of Odisha has substantial share of low grade coal for which State could not gain more from overall dispatches of coal.
Earlier, Chief Minister Naveen Patnaik had requested the Prime Minister and Union Coal Minister Piyush Goyal for early revision on a priority basis.
The State also argued that additional levy of Rs 295 per tonne collected by the Centre from the prior allocates of cancelled coal blocks should be transferred to the State Government.
Besides, the ‘Clean Environment Cess on coal, though enhanced to Rs 400 per tonne in Union Budget 2016-17, is not also being shared with State Government since then. The Odisha Government has demanded to share 60 per cent of total amount collected under the National Clean Energy Fund (NCCF) among the coal bearing state.