BHUBANESWAR: The Centre on Tuesday once again made it clear that there is no proposal for enhancement of royalty on coal, which Odisha has been demanding for quite some time.
“The issue raised by Odisha for enhancing rate of royalty from 14 per cent to 20 per cent was discussed during the Eastern Zonal Council meeting held at Bhubaneswar on February 28, 2020. After deliberations the issue was decided to be dropped,” Union Minister of Coal and Mines Pralhad Joshi informed Rajya Sabha on Tuesday.
Responding to queries on the issue from BJD MP Muzibulla Khan, the Minister said a study group was constituted on July 21, 2014 for examining the demand from states for revision of royalty rates on coal and lignite.
The study group inferred from the comments of the stakeholders that the coal producing states had suggested to increase the rates of royalty from existing 14 per cent to roughly 20 per cent, whereas the coal consuming stakeholders suggested to reduce the rate of royalty from 14 per cent to roughly 5-6 per cent. The study group has considered that there is gain in revenue to the coal producing states due to ad-valorem rates of royalty, coupled with DMF, after last revision in rates of royalty in 2012, whereas implementation of GST has given some relief to the coal consuming states and industries.
In such a scenario, any increase in rate of royalty will make the power to consumer expensive, whereas decrease in rate will adversely impact the revenue of the coal producing states. “The suggestion of the study group was accepted by the Government,” Joshi said.
The State government has been consistently putting pressure on the Centre to increase coal royalty and share at least 60 per cent of the green cess collected from Odisha.
The Centre is collecting clean energy cess of Rs 400 per tonne of coal which amounts to more than Rs 50,000 crore, 60 per cent of the cess will be Rs 30,000 crore, which the State can utilise for economic development of coal mining areas and the affected people.