Thursday, Oct 30, 2014

Cabinet approves hike in royalty rates for minerals

ENS Economic Bureau | New Delhi | Posted: August 21, 2014 12:59 am

The government on Wednesday approved the hike in royalty rates of at least 10 minerals, which will enrich the exchequer of states by over Rs 12,000 crore. But it is likely to make the prices of metals like steel and aluminium shoot high with the rise in raw material costs.

The hike in royalty rates understandably translates into enrichment of the coffers of states like Orissa, Jharkhand and Chhattisgarh by at least over Rs 4,000 crore each especially for major minerals like iron ore and bauxite.

The Cabinet, chaired by Prime Minister Narendra Modi, approved hiking the royalty for major minerals like iron ore to 15 per cent. The proposal before the Cabinet was also to hike the rate of phosphates to 12.5 per cent from 11 per cent, metallurgical bauxite to 0.6 per cent from 0.5 per cent and lead from 1.7 per cent to 14.5 per cent. The hike excludes coal and lignite and sand stowing. The UPA government had agreed to hiking the royalty, but the process had got stuck due to inter-ministerial differences. The government sees the hike as crucial in bridging the deficit in Centre-state relations.

In fact these states have been campaigning for the past two years for jacking up royalty rates. The states have been arguing that the prevailing method of computing mineral royalty was faulty was it did not reflect the true intrinsic value of the minerals and are losing revenue.

Currently the royalty rates are computed as per the pit mouth value of minerals by the Indian Bureau of Mines, which were last revised in 2009.

RK Sharma, secretary general of the Federation of Indian Mineral Industries said that the hike would translate into higher prices of metals. He added that steelmakers’ sourcing costs would go up and even those with captive mines would have to shell out more to state governments.

Govt cuts export price of onion on improving supply

NEW DELHI: The government on Wednesday reduced the minimum export price (MEP) of onion to $350 per tonne following improvement in domestic supply situation and softening of prices.

In June, the MEP on onion was re-introduced at $300 per tonne which was further raised to $500 per tonne in July as domestic prices had continued to move upwards.

“The MEP of onion has been brought down to $350 per tonne as its availability has increased,” law minister Ravi Shankar Prasad told reporters after a Cabinet meeting. PTI

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