Home Business Times Reopening of merchant mines to keep Odisha’s economy buzzing again

Reopening of merchant mines to keep Odisha’s economy buzzing again

Reopening of merchant mines to keep Odisha’s economy buzzing again

Source: Google

Twenty-one iron ore, manganese and chromite blocks under the leasehold of merchant owners(Reopening of merchant mines to keep Odisha’s economy buzzing again) are set to recommence operations again within a month after the execution of lease deeds with the state government.

The resumption of mining activity at these non-captive blocks would bode well for the state revenues that have been immensely hit after the onset and rapid spread of Coronavirus pandemic.

The validity of these merchant leases had lapsed on March 31, 2020. The state government had successfully auctioned these resources well before the expiry of their lease tenures.

Online auctions of the 21 blocks witnessed frenetic bidding activity with the average premium standing at 104 per cent.

To facilitate seamless transfer of mine ownership and ensure continuity in operations, the Union government by the dint of an Ordinance had extended the validity of all statutory approvals like environment clearance, forestry clearance and others by two years.

However, the outbreak of Covid-19 pandemic queered the pitch for uninterrupted mining operations.

Barring essential departments, all other administrative departments were under shutdown as the people observed home quarantine to check the spread of the deadly contagion.

Of late, the state mines department has issued vesting orders to reopen the merchant mines after collecting the NPV (Net Present Value) from the leaseholders. NPV is paid in lieu of diversion of forest land for non-forest activities.

It may be noted that mining is the single largest contributor to the Odisha government’s non-tax revenue kitty.

Last fiscal, the state mopped up mining revenue in upwards of Rs 10,000 crore. However, the beginning of this fiscal has been sobering both for tax and non-tax collections.

Both VAT and GST collections have tapered as businesses and commercial establishments were shuttered after the nationwide lockdown that lasted over five weeks.

The resumption of merchant mines should solace the state officials and shore up revenue.

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