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Karnataka mining scam may have cost exchequer Rs 50,000 crore #Indiashining

 

NEW DELHI: The scale of the Karnataka mining scam seems to be getting bigger with the estimates of an expert committee suggesting that the alleged robber barons who engaged in illicit mining may have cheated the state of Rs 50,000 crore in taxes and other levies.

The mining syndicate which thrived across regimes claimed that it was taking out just 50 million tonnes of iron ore every year whereas inspections showed that in reality, another 30-40 million tonnes of ore was illegally mined and siphoned off.

Considering that the recent e-auction for just 26.58 million tonnes brought in Rs 1,496 in various levies, the loss to the state exchequer works out to Rs 7,000 crore every year over the last one decade.

The Supreme Court’s environment panel, Central Empowered Committee (CEC), submitted its report to a bench of Justices Aftab Alam, K S Radhakrishnan and Swatanter Kumar on Thursday and said till July 31, 26.58 million tonnes of was sold through e-auction for Rs 6,416 crore.

“In addition to the sale price, about Rs 1,496 crore has been recovered and paid by the monitoring committee to the government — Rs 606.24 crore as royalty, Rs 594.06 crore as forest development charges, Rs 270.65 crore as VAT and Rs 25.11 crore as CST,” said the report submitted to the court by ’s member secretary M K Jiwrajika.

CEC sources said if the private lease holders had sold the iron ore for Rs 6,416 crore, then they would have paid income tax of over Rs 2,100 crore to the government. So, along with the various levies, the government would have got almost Rs 3,600 crore from the entire transaction.

Before the apex court banned mining completely, private lease holders had declared sale of 50 million tonnes of iron ore per year on an average and inspection showed that another 30-40 million tonnes of ore was illegally mined and siphoned off.

If sale of the total 80-90 million tonnes of iron ore was shown as legal by the private parties every year, then they would have earned around Rs 18,000 crore, over which income tax would have been Rs 6,000 crore. In addition, the government would have got nearly Rs 1,500 crore as royalty, FDC, VAT and CST. This means the government would have got around Rs 7,500 crore every year. But what the government actually got was only around Rs 500 crore from the private parties.

Thus, an estimated loss of Rs 7,000 crore to the exchequer per year happened for nearly a decade and CEC sources said the entire illegal extraction of iron ore and under-reporting of sale and extraction could have cost the exchequer Rs 50,000 crore.

The bench asked the Karnataka government to file its response to the CEC report after amicus curiae Shyam Divan and A D N Rao informed the court that the reclamation and rehabilitation plan for 16 mines had been prepared. But the bench insisted that it would permit resumption of mining in these mines only after the rehabilitation plan was implemented on the ground.

To make available adequate quantity of iron ore for iron and steel plants dependent on the ore extracted from Bellary-Hospet, Tumkur and Chitradurga districts, the bench sought an update from NMDC, which alone has been allowed by the court to undertake limited mining operations.

Senior advocate Arvind Datar, appearing for , said the PSU had the capability to extract 10 lakh tonnes of iron ore but it faced problems in transporting the extracted mineral and lack of assured long term demand.

The Iron and Steel Manufacturers Association and Federation of Indian Mineral Industries through senior advocates C S Vaidyanathan and T S Andhyarujina said their clients were ready to lift the mineral. The bench asked representatives of industry associations, ministry of environment and forests (MoEF) and NMDC to sit with the CEC on Monday to chalk out long-term e-auction scheme and place it before the court on August 17.

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