Ranchi, Oct. 12: In a bid to develop the infrastructure of mining areas, the state government has decided to tax public and private houses involved in extracting minerals. The money collected from the business houses as cess would also be utilised to enhance the socio-economic status of the residents of the mining areas.

“We have planned to impose cess on mining activities. The mining houses will have to pay the cess to the state government besides the royalty,” the state mines and geology secretary, Santosh Kumar Satpathy, told to The Telegraph.

The state government has formed a committee with chief minister Madhu Koda as its chairman to formulate the quantum of the cess to be levied on the minerals. The notification regarding imposing the cess would be issued within two months, said Satpathy.

The committee would calculate the cess on the basis of annual production of the mining units in the last two fiscals and the current market price of the mineral being excavated by them.

Several public and private industrial houses have expressed “unhappiness” over the state government’s move, though.

“The decision to impose cess is a clear indication that the state government is punishing the mining industries as the Centre is not ready to fulfil its demands on coal royalty,” said a senior official of a mining company.

The state government has taken the decision to impose cess despite the Centre’s opposition. The Union coal ministry had recently turned down Jharkhand’s request to impose cess on coal during a meeting in New Delhi.

The state, argued Satpathy, cannot continue to incur financial losses. Jharkhand, he said, has been requesting the Centre to alter the process of fixing royalty on coal. Instead of determining it on the basis of tonnes, the states should get royalty on coal on ad-valorem basis, depending on the present market price of coal.

If the royalty on coal is fixed on ad-valorem basis, the Jharkhand government’s revenue collection would double. The annual royalty from coal is about Rs 900 crore in the state at present.

Officials of mines department said Section 49 of the state list of the Indian Constitution empowers any state government to collect cess on minerals. “Bengal has this kind of arrangement. It charges cess apart from royalty on the minerals. It is nominal, though,” Satpathy added.