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Mining department draws flak for below par recovery

Published: 26th March 2013 01:06 PM  |   Last Updated: 26th March 2013 01:06 PM   |  A+A-

Revenue from the mining sector may be the single biggest contributor to the State’s non-tax revenue, but the Mining department has drawn flak from the Comptroller and Auditor General (CAG) of India for below par recovery.

 In its latest report on the State’s revenue sector for the year ended March 31, 2012 tabled in the Assembly on Monday, the CAG pointed out that during 2006-11, there was short levy or non-realisation of royalty, dead rent and surface rent with a revenue implication of `1,685.72 crore in 1,297 cases.  Of these, the Steel and Mines department accepted audit observations in 759 cases involving `918.08 crore, but recovered only ` 9.72 crore in 164 cases.

 The average recovery of only 1.06 per cent, as compared to acceptance of objections, was very low and it ranged between 0.01 per cent to 28.34 per cent, the CAG report said.

 In 2011-12, records of 19 units relating to mining receipts were test-checked by audit and it found non/short-demand of royalty, dead rent/surface rent, non/short recovery of interest and irregularities of miscellaneous nature involving `1,299.33 crore in 306 cases. The Mines department accepted under assessment and other deficiencies involving mining receipts of `1,114.24 crore in 159 cases pointed out by audit during 2011-12. An amount of Rs 2.57 crore was recovered in 62 cases during 2011-12.  According to the CAG report, arrears of mining receipts stood at Rs 1,844.92 crore (as on March 31, 2012).

This included `9.31 crore outstanding for more than five years, `1,334.68 crore under dispute, `1.62 crore locked up in litigation, `1.46 crore under certificate proceedings, `2.34 crore under write-off proposals and the remaining ` 504.82 crore being recoverable.

 “It is a matter of concern that similar omission have been pointed out by audit repeatedly in the audit reports for the past several years, but the department has not taken adequate corrective action,” the report said. The CAG advised the Mines department to revamp its revenue recovery mechanism to ensure that it can recover at least the amount involved in the accepted cases.

 The receipts from the mining have been steadily increasing over the years and accounted for a major source of revenue (71 per cent) of the total non-tax revenue of the State in 2011-12.

 Though the Steel and Mines department attributed the increase to enhancement of royalty of iron ore and chromite by Indian Bureau of Mines, the audit, however, noticed that the increase in revenue was due to adoption of royalty on ad valorem basis fixed by the Centre in 2009 in lieu of the per tonne basis fixed earlier.

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