New Delhi: The Union Cabinet’s nod on the proposed Mining and Mineral (Development and Regulatory) bill 2011 on Friday has paved way for expediting development schemes in the mineral-rich districts of the country.

The Union Cabinet chaired by the Prime Minister, passed the draft MMDR bill which will be introduced in the Parliament during the winter session.

MMDR mandates the mining companies to provide 26 percent of their net profit (post-tax profit) for welfare of the affected people.

The draft bill also suggests several provisions for checking illegal mining as well as setting up special courts for disposing the cases related to illegal mining.

The MMDR also provides for a big revamp in the existing bidding process for mining. As per the new norms, the state governments can decide the minimum bid price by identifying the mining sites.

Corporate world unhappy over draft bill

Reacting to the proposed bill, industry body FICCI said new provisions for paying additional Rs 10000 crore per year by the coal firms cumulatively will adversely affect their revenues.

If the draft bill is ratified by the Parliament, the coal firms will have to bear tax at the rate of 61.12 percent, a substantial increase from the existing 47.74 percent. The effective tax rate will rise from 43 percent to 55 percent for iron ore companies.

“We are concerned whether the funds will be used properly,” said the CII officials.

JPN/Bureau