Odisha government eyes 9,049 crore windfall from mining sector in Q1

BHUBANESWAR: The state government expects huge revenue gain from the mining sector during the 2021-22 financial year with most of the mines auctioned before the outbreak of Covid-19 having started production.
Sources in the state steel and mines department said revenue collection from mining sector in the first quarter (April-June) is estimated at Rs 9,049 crore (as on June 28) compared to the Rs 2,735 crore collected in the corresponding period of the previous fiscal.
The collection is according to the initial estimate and may go up slightly after final audit by the department, said an official.
On growth of mining revenue, a senior official of the steel and mines department said, “The growth is because of collection of premium from the mineral blocks auctioned during February-March, 2020. While 19 blocks were successfully auctioned before outbreak of the pandemic, as many as 16 have started production and dispatch.”
The premium (committed during auction of mineral block) is a percentage on the sale of mineral which the lease pays to the state government as tax every month. It is over and above the royalty.
The mining revenue collection may not be the same in all the four quarters as production and dispatch may be affected in the second quarter because of monsoon. Lease holders, who have achieved the production target, may also go slow in subsequent quarters. “We will have a clear picture of annual collection from mining sector only after September-end,” said the official.
Looking at the current pace of revenue collection from mining sector, the total could be double the previous year’s (2020-21) collection, said another official.
Mining sectors contributed Rs 13,600 crore during the 2020-21 financial year while the collection was over Rs 11,000 crore during the 2019-20 financial year. With revenue collection from several other sectors like GST, VAT, excise, stamp duty and registration fee are expected to fall in the first quarter of the fiscal because of Covid-induced lockdown and shutdown, growth in collection of revenue from the mining sector should come as a breather for the state government.
With the Centre having already issued new mining auction rules, the state government plans to auction more than 12 mining blocks. A meeting of the empowered committee on mining auction is scheduled on Wednesday, which will take a call on auction while notification inviting tender is likely to be issued by July second week, said the official.
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