A Parliamentary panel on Tuesday recommended that the controversial 26 per cent profit sharing clause in the Mining Bill be dropped from the proposed legislation. The move, if accepted by the Government, would go a long way in reducing the financial burden on various mining companies like Coal India ltd (CIl).
The Parliamentary Standing Committee on Coal and Steel in its report on the Mines & Minerals (Regulation and Development) Bill 2011 or MMDR Bill, which was tabled in Parliament, suggested that the clause - under which coal and lignite companies are to share their profits from mining activities with local communities affected by their operations - be removed and instead the companies should contribute an amount equal to the royalty paid to state governments during the fiscal.
“The Committee recommends that in case of coal and lignite, the mechanism for payment to District Mineral Foundation on the basis of royalty paid during the financial year may be worked out instead of an amount equal to 26 per cent of the profit and amendment be made in the relevant Clause as proposed by the Ministry of Coal,” the panel said in response to the much in the news clause, which had also created a lot of resentment within the corporate sector.
In another recommendation, the Parliamentary panel which is headed by Trinamool Congress MP Kalyan Banerjee, also voted for uniformity in royalty rates of coal in all the states across the country.
The panel gave this suggestion in the light of the fact that royalty rates proposed for different grades of coal produced in West Bengal differs from other states.
Thus it said that “the royalty for different grades of coal be same in all states including State of West Bengal in all fairness”.
Batting for state-owned companies, the panel further said that PSUs should be given first priority while granting mineral concessions for prospecting or mining operations, something which is already existing.
It suggested that status quo be maintained especially in the case of strategic minerals like iron ore.
In another significant observation, the panel concurred with the Mines Ministry that “compensation for acquisition of land will be governed by the State or National Resettlement and Rehabilitation (R&R) policy or any other Act in force including the land Acquisition, R&R Bill, 2011 as and when the Bill is approved by the Parliament”