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Regular-article-logo Wednesday, 02 July 2025

Coal royalty rage at Centre

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Staff Reporter Published 22.06.07, 12:00 AM

Calcutta, June 22: Finance minister Asim Dasgupta today hit out at the Centre for again denying Bengal its “legitimate” share in coal royalty.

“The Centre has once again raised coal royalty without a corresponding hike in Bengal’s share. This is the fourth time since 1991 that the Centre has hiked royalty while depriving Bengal,” Dasgupta said at Writers’ Buildings.

Coal royalty has long been a thorn in the state’s economic relations with the Centre.

The minister pointed out that the state gets only Rs 21 crore every year as coal royalty when its share works out to around Rs 300 crore, considering the rates prevalent elsewhere. According to Dasgupta’s estimate, Bengal has lost over Rs 4,000 crore in revenues since 1991.

“The Centre had earlier argued that royalty for Bengal shouldn’t be increased as the state also charges a cess on coalfields. However, when this was challenged in the Supreme Court, it ruled in January 2004 that the cess imposed by the Bengal government was perfectly legitimate and constitutional,” Dasgupta said.

State governments have the right to impose cess on coalfields under item 49 of the state list, while determining royalty on coal is the sole prerogative of the Centre.

Bengal has offered to reduce cess rates but is not ready to forgo it completely.

“Chief minister Buddhadeb Bhattacharjee had written to the Prime Minister offering to roll back the cess on coalfields a little so that coal prices wouldn’t be affected in the case of a hike in royalty,” Dasgupta said. But it hasn’t drawn a positive response so far.

The Bengal government has also drawn the attention of the 10th finance commission to the issue, but to no avail.

The Centre’s other argument has been that a hike in royalty would adversely affect the price of coal in the state.

Dasgupta shot this down, saying other states have been allowed higher coal royalties without any significant rise in the price of coal.

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