Revision of Rates of Royalty and Dead Rent in respect of certain minerals (other than minor minerals, coal, lignite and sand for stowing)

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, yesterday approved the revision of rates of royalty and dead rent of all major minerals other than minor minerals, coal, lignite and sand for stowing, as per provisions of Mines and Minerals (Development and Regulation) (MMDR) Act, 1957 It also approved the application of these rates in all the States / Union Territories (UTs).

With this decision, the royalty to mineral rich States would increase by 41 percent from ₹ 9406 crore (2011-12) to ₹ 13274 crore (estimated). The Chief Ministers of these States have been repeatedly pressing for this issue. The biggest beneficiary States are those having sizeable tribal population such as:

Since 1987, the benefit of revised rate of royalty is not being extended to the State of West Bengal as it levies a cess on mineral bearing lands and this matter is still being agitated in various courts. However, the Study Group has recommended that the revised rates may now be applied to all the States/ UTs (including West Bengal) as levy of cess by West Bengal is being made under a different statute and does not operate as a legal ban on the proposed revision. The CCEA has accepted this recommendation with the result that West Bengal will receive the benefit of the revised rates of Royalty.

A mine leaseholder has to pay either royalty on extracted minerals or dead rent for leased area. The Second Schedule of the MMDR Act covers 50 major minerals and a separate category of all other minerals. As per section 9(3) and 9A(2) of the Act, the Government of India may amend and notify the rates of royalty and dead rent for the minerals listed in this Schedule. Such revision can be done not more than once in every three years.

The last revision of rates was notified on 13.08.2009. Hence the Ministry of Mines constituted a Study Group which consulted all stakeholders and gave its recommendations on 28.06.2013. Government has largely accepted the group’s recommendations.