National Mineral Policy 2006 - Department of Mines

extracted. The main purpose of levying dead rent is to discourage the lessee from keeping themineral property idle. The existing rates of dead rent are based on the area of the lease andthe value of minerals. Accordingly, the dead rent applicable is higher for the higher valuegroup of minerals. There is also a provision under the MMDR Act that if there is a differencein the amount of royalty payable on the minerals extracted from an area and the amount ofdead rent payable for that area, the mine owner will be required to pay the higher of the twoamounts.6.4 Annexure 7 gives the total collection of revenue from royalty on minerals in the years2002–03, 2003–04, and 2004–05 in states with significant mining activities. Annexure 8gives figures of mineral-wise collections from royalty in the major mining states of thecountry, viz. Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Orissa, and Rajasthan.This statement brings out the following significant features: (a) coal constitutes the majorproportion of the royalty revenue of four of the six major mining states, accounting for 70–95per cent of the royalty revenue in 2004–05; (b) royalty collection from minerals other thancoal (Annexure 8) accounted for modest amounts of Rs 139.79 crore, Rs 38.33 crore, Rs172.49 crore, Rs 118.11 crore, Rs 303.05 crore, and Rs 144.37 crore in Chhattisgarh,Jharkhand, Karnataka, Madhya Pradesh, Orissa, and Rajasthan, respectively, in the sameyear; (c) the significant minerals contributing to royalty revenue in 2004–05 were limestone(Rs 119.95 crore) for Madhya Pradesh, iron ore (Rs 23.52 crore) and bauxite (Rs 10.54 crore)in Jharkhand, and iron ore (Rs 42.33 crore) and limestone (Rs 62.06 crore) in Chhattisgarh;Orissa has a fairly diversified mineral sector and the main minerals contributing to royaltyrevenue in 2004–05 were iron ore (Rs 72.85 crore), chromite (Rs 44.03 crore), bauxite (Rs29.05 crore), manganese (Rs 11.18 crore), and limestone (Rs 10.35 crore). Rajasthan’srevenue from royalties in 2004–05 is the highest, and their main income is from lead and zinc(Rs 151.23 crore), limestone (Rs 116.56 crore), and rock phosphate (Rs 30.84 crore);Rajasthan has substantial royalty collection from minor minerals with marble (Rs 96.48crore), masonry stones (Rs 24.66 crore), and sand stone (Rs 38.96 crore) as the mainminerals. Karnataka’s main royalty revenue in 2004–05 was from iron ore (Rs 79.75 crore),limestone (Rs 54.24 crore), and gold (Rs 8.32 crore). A concern of the major mining states isto increase their revenue from the mineral sector, which is at a very low level. Since four ofthe major mining states are also industrially underdeveloped, their concern is also that if enduseof the minerals is made in other states a major proportion of the economic benefits isappropriated by those states. The revenue generation by the mineral sector thus gets linked to121