Business Line quoted a report of the Comptroller and Auditor General of India as saying that illegal mining during the period 2006 to 2011 in 3 districts of Karnataka has resulted in a loss of INR 3,414.45 crore in revenue, of which the state government could recover only INR 7.22 crore.
The CAG report on Controls and Systems of Sustainable Mining in Karnataka revealed a number of system and compliance deficiencies in the assessment, collection and accounting of revenue involving monetary implications of INR 3,414.45 crore.
The report, tabled in the Legislative Assembly on December 12th, did not cover specific instances of illegal mining already examined by the Karnataka Lokayukta and under investigation by the CBI.
The report said that in Chitradurga, Tumkur and Hospet divisions, 4 lessees had extracted 1.468 million tonnes of iron ore valued at INR 150.59 crore without the consent of the Karnataka State Pollution Control Board.
Mining of iron ore and stone quarrying in Karnataka was selected for the audit as they were the two major contributors of revenue to the State in major and minor minerals.
It said that iron ore of 0.995 million tonnes, valued at INR 107.40 crore, was extracted beyond the permissible limit prescribed in the mining plan. The cost of the mineral, though recoverable, was not recovered.
Revenue loss
The report said that despite the accelerated growth in turnover of the mining companies from 2003-2004 onwards, there was no upsurge in revenue from royalty.
The report added that “This indicates failure of the government to recognize the revenue mobilization opportunity in an industrial sector which was showing an exponential growth.”
Incorrect sales price
It said that incorrect application of sale prices of iron ore published by the India Bureau of Mines in 36 cases in three divisions resulted in short levy of royalty amounting to INR 13.11 crore.
The report added that the lack of coordination between work executing departments responsible for deduction of royalty at source and Department of Mines and Geology resulted in non/short collection and remittance of royalty to the extent of INR 23.75 crore to the government.
Processing fee
The report said though there was a provision for levy of processing fee for minor minerals, no such fee was prescribed for major minerals. This resulted in potential foregoing of revenue of INR 37.85 crore for the period 2007-2008 to 2009-2010.
