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Shah sword hangs over Odisha

- State stares at revenue loss

Bhubaneswar, Jan. 23: The state government is in a state of anxiety as the Justice M.B. Shah Commission’s report on the mining scam would be submitted in the Supreme Court by January 27.

If the commission’s recommendation is implemented, a number of active mines in Baitarani river basin will face closure. This will hit the state’s revenue collection further and so far more than 200 mines have already been closed down in the wake of Shah commission’s inquiry into the mining scam since 2010.

Many major companies such as Steel Authority of India Limited (SAIL), Tata Steel, Aditya Birla, Essel Mining, Jindal Steel and Power Limited (JSPL) and Sarada Mining are likely to be affected as the mines that supply ores to these companies and various others are required to seek environmental clearance once again.

The commission has maintained that environmental clearance granted to all the 55 mines would be revisited.

Tata Steel, which is a major contributor to the state exchequer, procures 80 per cent of its iron ore requirements from Odisha.

The company, which contributes Rs 800- 900 crore to the state’s kitty from mining alone, has eight mines in the state.

“Tata’s upcoming six million tonne steel plant is almost at the commissioning stage. At this point, if anything goes wrong, it will effect a backward pull to a state struggling hard to put industrialisation back on the track,” said a senior official.

The other possible victims — SAIL, Aditya Birla Group’s Essel Mining and JSPL — also contribute to the state exchequer in a big way. The JSPL has already invested nearly Rs 20,000 crore in the state.

With nearly 200 mines becoming non-operational, thousands of mine workers are struggling for survival.

Many young entrepreneurs, who had purchased trucks for transporting the minerals from Keonjhar to Paradip port, are now sitting idle.

“I took bank loans to buy two trucks. Now they are no of use to me. More than 20,000 trucks are lying idle,” said Manoj Mohapatra, a Keonjhar businessman.

The state government has failed to meet its mining revenue target for 2012-13 by 6.5 per cent, though it was higher by 16.71 per cent over 2011-12.

Mining revenue, the single biggest contributor to the state’s non-tax revenue segment, stood at Rs 5,352.94 crore in 2012-13 as against a target of Rs 5,700 crore. In 2011-12, the mining revenue collection was Rs 4,586.64 crore.

“While the mines face a threat of closure, our demand for implementing the mineral resources tax has been ignored so far by the Centre,” said an official.

Steel and mines minister Rajani Kant Singh said: “The UPA government is not at all interested in the development of industrialisation of Odisha. Despite our repeated requests, the proposal on imposing the mineral resources tax has not got the Centre’s nod.”

Despite a slowdown in mining activities consecutively for the last three-years in the state, tax collection has not dipped. The total tax and non-tax revenue collection in the state has recorded a growth of 15.37 per cent over the last fiscal year’s collection.

The state government has set an ambitious target to collect Rs 26,350 crore in the current fiscal 2013-14.

“Tax collection would have been more if all the mines were in operation in the Sundargarh and Keonjhar belt. The mining activities have almost come to a standstill after Justice M.B. Shah Commission started its inquiry in 2011,” said a senior official.

Finance minister Prasanna Acharya said: “We are confident that we will meet the target. We have chalked out plan and our officials are working in this direction.”

As per the plan, the state has set itself a target of collecting Rs 18,350 crore as direct tax revenue and Rs 8,000 crore under non-tax revenue.

“But if the existing mines become non-operational, it would certainly hit tax collection,” said an official.

The state government collects direct tax revenue from land revenue, stamps and registration, excise, sales tax, vehicle tax, entry tax and electricity duties. “As stamp duty has almost doubled during the last three years, it has helped the government increase its revenue base,” an official of the finance department said.


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