Indian government increases royalty rates on minerals including Iron ore, Bauxite, Chrome ore and Manganese ore.
Indian government today gave nod to increase royalty rates on minerals including Iron ore, Chrome ore, Manganese ore and Bauxite, which is a long-awaited move. Finance Minister had earlier mentioned that revision in royalty rates are due for quite sometimes.
“Cabinet in-principle approved revision of mineral royalty. There are 55 such items but this excludes Coal, lignite and sand for stowing,” Communications and IT Minister, Ravi Shankar Prasad said after the Cabinet meeting.
Paving the way for hike in royalty rates after about 6 years the union cabinet today cleared a proposal to hike mineral royalty rates of major minerals including Iron ore and Bauxite. With this decision, royalty rates on Iron ore would hiked to 15% from 10%.
However, the royalty hike would not be applicable on Coal and lignite.
Mineral rich states including Odisha have been demanding increase in mineral royalty. However, the industry buddies like Assocham have been opposing any proposal to hike royalty rates as it’ll escalate cost of steel making (in case of Iron ore) and push inflation upwards.
- Cabinet proposal had sought to raise the royalty rate on Iron ore and Chromite to 15% from 10% now
- For Bauxite, it wanted the royalty to be hiked to 0.6% from 0.5% now
- There were also plans to hike the rate for Manganese ore to 5% from 4.2%
The rates of royalty, revised in every three years, for major minerals excluding Coal, lignite and sand, for stowing were last revised in August, 2009. It is charged on ad valorem basis, depending on increase/decrease in mineral prices.
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