Bhubaneswar: In a setback to the state government, the Centre Tuesday brushed aside its demand for upward revision of coal royalty stating the move will lead to hike in power tariff forcing consumers to bear the burden.
“Increase in royalty will lead to increase in cost of coal which in turn will increase cost of power and this will ultimately impact the common man. So at least at this point of time there is no consideration before Government of India to increase coal royalty,” Union coal secretary Anil Swarup said after meeting Chief Minister Naveen Patnaik at the Secretariat here.
The state government has been urging the Centre to revise coal royalty for the past one year. Patnaik had also appealed to Prime Minister Narendra Modi for the same in July this year.
The CM had said coal bearing states have reasonable expectations of adequate revenue contribution from coal mining and the rate of royalty, fixed at 14 per cent ad valorem, has not been revised for more than four years now even though the Ministry of Coal constituted a study group to consider the rates on July, 21, 2014.
He pointed out that coal bearing states like Orissa contribute to the country’s requirement of power but they have to face the adverse impact of mining like displacement of people, particularly tribals, reduction in forest area, greater risks of environmental pollution and strain on water resources and infrastructure.
However, Swarup said, “As far as the royalty is concerned it’s a national decision. It applies to all the states.”
Though the Centre has provision to revise coal royalty rates once every three years, the union secretary said, “We believe that royalty rate at this point of time is quite ok.”
Meanwhile, speaking on the coal production of Mahanadi Coalfields Limited (MCL) he said the company is doing very well and will double its production by 2020.
He also said that sufficient coal is available for all PSUs and all power plants have adequate stock.
On coal block auction, he said, “When the auction started there was acute shortage of coal in India. In the fourth round of auction there were not many takers for coal blocks and until there is a demand, there is no point in unnecessarily auctioning coal blocks.”
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