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Replace profit-sharing by coal companies with royalty payment: Panel

NEW DELHI: A Parliamentary panel has recommended removal of the provision of 26 per cent profit sharing by coal and lignite miners with project-affected people and replacing it with a system based on royalty payments by the concerned firms. 

The amendment was proposed by the 
Coal Ministry to the Standing Committee, headed by Trinamool Congress MP Kalyan Banerjee. 

Standing Committee on Coal and Steel Committee, which today presented its report to the Parliament, gave its go ahead to other crucial proposal of the new Mines Bill of sharing an amount equivalent to royalty by non-coal and non-lignite miners with project-affected persons. 

The Mines and Mineral (Development and Regulation) Bill, 2011, seeks to replace a more than half-a-century-old law under the same name and was tabled in Parliament in December, 2011. Later, it was sent to the Standing Committee. 

As per the provisions of the new Mines Bill, coal and lignite miners would have to share 26 per cent of the profits from their mines with people impacted by projects. 

For non-coal and non-lignite miners, the new law has proposed payment of an amount equivalent to royalty paid by the companies to the state government. 

The collected money was proposed to be used for the welfare of the project-affected persons through a newly created District Mineral Foundation. 

However, the Standing Committee recommended that "in case of coal and lignite, the mechanism for payment to District Mineral Foundation on the basis of royalty paid during the financial year may be worked out instead of an amount equal to 26 per cent of the profit and amendment be made in the relevant clause as proposed by the 
Ministry of Coal." 

It also called for bringing District Mineral Foundation (DMF) under the 
CAG audit purview and asked the government to increase representation of local community in the DMF council.

In its recommendations, the Committee also said the state governments should get free hand in deciding state level cess on the miners. It said present provisions of fixing the rate of cess not exceeding 10 per cent of the royalty is "interfering" with the right of state government. 

It also recommended adding a provision in the new Mines Bill "whereby no extra or any weightage is assigned by the concerned states for setting up of industries in that state only" while allocating the mineral concessions. 

This would help in overcoming region disparities and promote development across regions/states in setting up of mineral based industries, the Committee said. 

The new Mines Bill proposes to give full powers of extension, grant of mineral concession to the states. It also provides for allocating minerals concessions for all major minerals, except coal and lignite, mainly through the competitive bidding route.