BHUBANESWAR: The state government has fallen short of realising the targeted revenue from the mining sector, a major source of non-tax revenue due to depression in the domestic market and ban on export of fines. The collection from mining activities in the 2022-23 financial years is estimated at Rs 37,174 crore (provision) as compared to the highest-ever collection of Rs 49,859.12 crore in 2021-22. The state government had made a projection of non-tax revenue collection of Rs 48,200 crore including Rs 43,444 crore from mining sector during the last fiscal.
The revenue generated from mining activities comes in the form of royalty on sale of minerals, contribution to the district mineral foundation (DMF) and premium from mineral blocks auctioned. Iron ore is major contributor of revenue to the state exchequer.
The shortfall in the mining revenue is attributed to the drastic fall in the prices in the iron ore during the April-October period last year. Iron ore lumps (62-62 per cent Fe grade) which was selling at Rs 7,083 per tonne in May 2022 crashed to Rs 6,732 per tonne in October the same year.
Similarly, iron ore fines above 62 per cent Fe grade and below 65 per cent Fe grade was selling over Rs 6,000 per tonne in May 2022. The price of the same grade fines came down to Rs 4,153 per tonne in October. The other grade of iron ore lumps and fines also witnessed a fall in the price due to low demand in the domestic market and imposition of 50 per cent tax on the export of fines, sources in the Steel and Mines department said.
The prices of iron ore started looking up after the government withdrew the duty imposed on the export of iron ore fines in November last year. With China lifting Covid restriction and started importing iron ore from India, the market is recovering, sources added.
“We hope for a better revenue collection in the current financial year as the union budget has made a massive outlay for infrastructure projects, steel being the major input. Besides, the export market is looking brighter,” it said.
The mining revenue of the state was Rs 13,918 crore between 2020-21 and Rs 11,019 crore in 2019-20. The DMF collection of the state till January 31, 2023 was a massive Rs 21,374 crore, which is a record among all states.