BHUBANESWAR: Lack of any significant announcement for mineral rich states or the poverty-stricken tribal populace of Odisha in finance minister Pranab Mukherjee's latest budget has not gone down well with the state government. CM Naveen Patnaik's strong plea for introduction of mineral resource rent tax (MRRT) has also not found favour with Mukherjee.
"We are greatly disappointed that Mukherjee has not provided anything to mineral-rich states like Odisha, which continue to suffer from high poverty levels. He has also not given any special dispensation for our high tribal population, especially those living in the KBK areas," finance minister Prafulla Ghadai told TOI on Friday. About 22.5% of Odisha's 4.19 crore people are tribals.
Mukherjee announced enhancement in allocation for the Backward Regions Grant Fund (BRGF), under which KBK would benefit. But the state government's demand for an eight-year perspective plan worth Rs 4,500 crore to expedite socio-economic development of the backward KBK region has not got the Centre's nod.
Similarly, Odisha's demand for a special development package as given to states like Tamil Nadu, West Bengal and the Bundelkhand region of Uttar Pradesh in the past has also been ignored, officials said. Odisha could, however, hope to benefit from enhanced allocation to agriculture sector, including Rs 50 crore announced for Odisha University of Agriculture and Technology.
With huge deposits of iron ore, bauxite, chromite and coal, among other minerals, Odisha has since the last several years been fighting for enhancement of royalty on major minerals and of late proposed levy of MRRT at the rate of 50% of surplus rent on iron ore in view of "super normal profits" being earned by miners. MRRT could mean miners paying half of the extra money they earned from iron ore above a base price to be fixed by the Centre.
Presently, mineral-bearing states get 10% of the pit-head price of iron ore as royalty. This, the Odisha government says, is paltry and wants a new law, under which miners shall have to give half of the profits they earn to the state when the market price of ore is above the base price, official sources said, adding, Odisha could generate an estimated Rs 5,000 crore additional revenue annually from the proposed tax. Naveen, in letters to PM Manmohan Singh and Union mines minister Dinsha Patel, has said the state government wishes to use the revenue generated from MRRT for social and physical infrastructure and strengthening welfare measures to improve livelihood of poor people in the state, especially in mining districts.
However, Mukherjee's budgetary proposals made no mention of MRRT. Rather, for improving productivity and efficiency in surveying and prospecting for minerals he proposed slashing of basic customs duty on machinery and instruments for surveying and prospecting from 10% or 7.5% to 2.5%. He also announced full exemption from basic customs duty for coal mining projects.
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