Odisha seeks royalty hike on coal, share from Clean Environment Cess

Bhubaneswar: Odisha Chief Minister Naveen Patnaik on Tuesday sought the intervention of Prime Minister Narendra Modi to increase royalty on coal and release 60 per cent share of Clean Environment Cess to coal-bearing states.

In a letter to Prime Minister, Patnaik said the coal-bearing states have to face the adverse effects of mining such as displacement of people, reduction in forest area, greater risks of environmental pollution and strain on water resources and infrastructure, and therefore have reasonable expectations of adequate revenue contribution from the coal mining sector.

He noted that the rate of royalty on coal, fixed at 14 per cent ad valorem, has not been revised for more than four years now even though the Ministry of Coal has constituted a Study Group to consider revision of rates of royalty July 2014.

"While the rate of royalty has remained unrevised, the Central Government has enhanced the levy of 'Clean Environment Cess' to Rs 400 per ton in the Union Budget 2016-17. This cess is not shared with the coal-bearing states, nor do the coal-bearing states get benefits from the funds collected as cess in proportion of their contribution to the cess.

"I have, earlier, suggested that this cess should be renamed as 'Environment and Rehabilitation Cess' and at least 60 percent of such funds should be shared with the coal bearing states to deal with negative externalities," he added.