Cabinet to take call on ad valorem royalty today

Jaiswal’s move has already been endorsed by the finance ministry and the Planning Commission would benefit states such as Orissa,Jharkhand,Andhra Pradesh,Tamil Nadu,Madhya Pradesh,Uttar Pradesh,Maharashtra and Assam.

“The average increase on their revenue would be 17.31 per cent for coal and 14.53 per cent for lignite. When implemented,these states will earn a revenue of about Rs 6,980 crore as against Rs 5,950 crore currently.”

West Bengal,however,will not be a beneficiary as it has an ad valorem cess of 25 per cent on coal. The state would be able to benefit from the proposed regime once it abolishes the cess.

“Royalty rates on coal and lignite have not been revised since 2007. Besides,the methodology used was cumbersome. The coal-rich states have been pleading for a better deal in terms of more royalty,We agree to their contention and have accordingly proposed an ad valorem regime,” Jaiswal told The Indian Express.

On the issue of calculating royalty for captive coal mines,Jaiswal said the benchmark price would be arrived at by looking at the basic pithead price for coal and lignite (as reflected in invoices) of a mine nearest to the location of the captive mine.

The minister added that the Mines and Minerals Development & Regulation Act prevents the Central government from increasing royalty more than once in a three-year period.

NLC’s JV for 1,980 MW UP power project likely to be on Cabinet table

The Cabinet is likely to take up a proposal for the setting up of a 1,980 MW power project jointly by the Neyveli Lignite Corporation and Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUN) at Ghatampur in Kanpur (Uttar Pradesh),which could entail investments of over Rs 11,000 crore.

A MoU was signed between NLC and the UPRVUN in December last year for setting up three units of 660 MW each using super critical technology,with the state assuring that it would push for a mega power status for the project as this would help in getting a concession of 10-15 per cent on machinery.