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No need for mine tax like Australia - Mr Dinsha Patel

India’s mines minister Mr Dinsha Patel refused to entertain the Odisha government’s demand for imposing a mineral resource tax on the lines of Australia and also questioned the state’s CM Mr Naveen Patnaik’s contention that miners are reaping supernormal profits.

Mr Patel said a slew of recent measures taken by his ministry would ensure that the mining community shares its profits for the greater well the people living in their areas besides enriching the coffers of the mineral rich states through sharing of royalties.

In his reply to Mr Patnaik’s January 25 letter on the subject, Mr Patel said that it would not be prudent to brand the entire mining community as profit seekers as they include small, medium and captive miners.

The entire issue of generation of supernormal profits needs a closer look due to various taxes and levies on the mining sector besides imposition of ad-valorem royalty for various grades of iron ore.

Seeking to allay Mr Patnaik’s apprehensions, Mr Patel said that in the new Mines and Minerals (Development & Regulation) Bill, 2011, the government has inserted a provision for setting up District Mineral Foundations wherein every miner would be mandated to pay an equivalent amount of royalty as part of the profit-sharing mechanism.

The minister told Mr Patnaik that it is imperative to ensure that benefits accrued through royalty, flow transparently to the local population in the mining zones with visible outcomes.

He wrote that “Higher royalty revenues sought by the state government for the local people make sense only when appropriate delivery mechanisms for benefit sharing are made effective.”

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