Lok Sabha Question No. 3938 (UNSTARRED), answered on 2017-08-10
Subject: Royalty on Coal and Clean Environment Cess
Ministry: COAL
Asked by: LADU KISHORE SWAIN, RITA TARAI

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK SABHA UNSTARRED QUESTION NO. 3938 TO BE ANSWERED ON 10.08.2017

## Royalty on Coal and Clean Environment Cess

## 3938. SHRI LADU KISHORE SWAIN: SHRIMATI RITA TARAI:

Will the Minister of COAL be pleased to state:

- (a) whether the loyalty on coal is revised appropriately and early and also 60 per cent  of  the  Clean  Environment  Cess  on  coal  is  earmarked  to  coal  bearing States  as  they  have  to  bear  the  cost  of  environmental  degeneration  and rehabilitation and if so, the details thereof;
- (b) whether any State Governments put forth their proposals in regard to the above and if so, the details thereof;
- (c) whether  any  arrangement  has  been  made  for  the  transfer  of  Rs.  566  crore payable by M/s. HINDALCO on account of coal block Talabira-1 to Odisha and if not, the reasons therefor; and
- (d) whether the Union Government proposes to issue suitable advisory for release of the claims of Odisha at the earliest and if so, the details thereof?

## ANSWER

## MINISTER OF STATE (IC) IN THE MINISTRY OF COAL, POWER , NEW & RENEWABLE ENERGY AND MINES

## (SHRI PIYUSH GOYAL)

(a) & (b) The State Governments have put forth their proposal with regard to revision of  royalty  as  well  as  sharing  of  Clean  Environment  Cess  on  coal.  Proposals  for  National Clean Energy Fund are invited from all states and coal bearing states are also encouraged to put in more proposals to use the funds collected under cess on coal. The provision of  Mines and Minerals (Development and Regulation) Act, 1957 do not require the royalty rates to be revised at  any  certain  interval.  It  only  requires  that  the  rate  of  royalty  cannot  be  enhanced more than once during any period of three years. The rate of royalty was last revised w.e.f. 10.05.2012. The ad-valorem rates as notified are still continuing. However, the Government has  established  District  Mineral  Foundation  (DMF)  in  districts  affected  by  mining  related operations. The object of DMFs is to work for the interest and benefit of persons and areas affected by mining related operations. The DMFs will be funded by statutory contributions from  holders  of  mining  lease  and  in  this  regard,  rules  specifying  rates  of  contribution  to DMFs has been notified on 17.09.2015, which prescribes the rate of contribution to DMF as follows:

- (a) 10% of royalty in respect of mining leases granted on or after 12.1.2015; and
- (b) 30% of royalty in respect of mining leases granted before 12.1.2015.

Contribution  will  directly  go  to  the  District  Mineral  Foundation  Trust  (DMFT)  of  the respective district.

The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) has been conceived by the Government which will be implemented by the District Mineral Foundations (DMFs) of the respective districts using the funds accruing to the DMFT. At least 60% of PMKKKY funds will  be  utilized  for  high  priority  areas  like:  (i)  drinking  water  supply;  (ii)  environment preservation and pollution control measures; (iii) health care (iv) education; (v)  welfare  of  women  and  children;  (vi)  welfare  of  aged  and  disabled  people;  (vii)  skill development; and (viii) sanitation. The rest of the funds will be utilized for the following: (i) physical infrastructure; (ii) irrigation; (iii) energy and watershed development; and (iv) any other measures for enhancing environmental quality in mining district.

Clean Environment Cess on coal, which is now part of Goods & Services Tax (Compensation to States) Act, 2017 is not  administered by Ministry of Coal. It is administered by Ministry of Finance.

(c) & (d)  The amount of Rs.566 crores payable by M/s Hindalco Industries Limited on account  of  coal  block  Talabira-I  is  the  additional  levy  amount  for  coal  produced  from Talabira-I coal block. The issue of  accrual of additional levy either to Central Government or to  State  Government  concerned  is  under  examination  in  consultation  with  Ministry  of Finance and Ministry of Law & Justice.

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