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Standing Committee on Coal and Steel (2013-2014)

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Standing Committee on Coal and Steel (2013-2014) STANDING COMMITTEE ON 49 COAL AND STEEL (2013-2014) FIFTEENTH LOK SABHA MINISTRY OF COAL COAL PRICING AND ISSUES RELATING TO COAL ROYALTY FORTY-NINTH REPORT LOK SABHA SECRETARIAT NEW DELHI FEBRUARY, 2014/MAGHA 1935(Saka) 1 FORTY-NINTH REPORT STANDING COMMITTEE ON COAL AND STEEL (2013-2014) (FIFTEENTH LOK SABHA) MINISTRY OF COAL COAL PRICING AND ISSUES RELATING TO COAL ROAYLTY Presented to Lok Sabha on 06.02.2014 Laid in Rajya Sabha on 06.02.2014 LOK SABHA SECRETARIAT NEW DELHI FEBRUARY, 2014/MAGHA 1935(Saka) 2 CC&S No. 88 Price: Rs.___ 3 © 2013 BY LOK SABHA SECRETARIAT Published under Rule 382 of the Rules of Procedure and Conduct of Business in Lok Sabha (Twelfth Edition) and printed by Jainco Art India, New Delhi – 110 005. 4 CONTENTS PAGE COMPOSITION OF THE COMMITTEE(2009-10)………………………………………………… (iii) COMPOSITION OF THE COMMITTEE(2011-12)……….………………………………………. (iv) COMPOSITION OF THE COMMITTEE(2012-13)….…………………………………………… (v) COMPOSITION OF THE COMMITTEE(2013-14)….…………………………………………… (vi) INTRODUCTION …………………………………………………………………………………………….... (viii) Introductory ……………………………………………………………………………………………………………….1 PART-A COAL PRICING CHAPTER –I Deregulation of Coal Pricing by Government…………………………………….5 CHAPTER-II Factors and Principles for determining Coal Prices…………………………...8 CHAPTER-III Revision of Coal Prices ……………………………………………………………………..17 CHAPTER- IV Coal Pricing from UHV to GCV grading system…………………………………22 CHAPTER –V New Coal Pricing Policy - Supply of Imported Coal on Cost-Plus basis …………………………………………………………………………………29 CHAPTER-VI Coal Regulatory Authority ………………………………………………………………32 5 PART-B COAL ROYALTY CHAPTER –VII Legal Provisions and Methodology for fixing Royalty Rates………….33 CHAPTER-VIII Royalty Rates on Coal ……………………………………………………………………..35 CHAPTER-IX Recommendations by Sarkaria Commission, Finance Commission and Study Group set-up by Government ………………………………………43 CHAPTER-X Cess Levied on Coal in different States……………………………………………..46 CHAPTER-XI Demand for increasing Royalty on Coal by States……………..…………….55 PART-C Observation/Recommendations of the Committee………………………………………. 60 ANNEXURES I. Details of Royalty paid to States during 2001-02 to 2011-12 by Coal India Limited and Singareni Collieries Company Limited ...... 73 II. Details of Cess and Royalty paid by the coal companies to the State Government of West Bengal along with royalty to be payable @ 6 14% ad-valorem for the period 2009-10 to 2011-12………………….. 74 III. Details of Royalty and Cess paid to the various State Governments during the last three years by the Coal India Limited (CIL) and its subsidiary Companies………………………………………………………………………… 75 IV. Details of Royalty and Cess paid to the various State Governments during the last three years by Neyveli Lignite Corporation and Singareni Collieries Company Limited ……………………………………………. 76 V Minutes of the Sitting of the Standing Committee on Coal and Steel (2009-10) held on 16.7.2010………….……………………………………………… 77 VI Minutes of the Sitting of the Standing Committee on Coal and Steel (2009-10) held on 16.08.2010……………………………………………………… 79 VII Minutes of the Sitting of the Standing Committee on Coal and Steel (2009-10) held on 26.08.2010…………………………………………………………… 81 VIII Minutes of the Sitting of the Standing Committee on Coal and Steel (2011-12) held on 20.01.2012…………………………………………………………… 83 IX Minutes of the Sitting of the Standing Committee on Coal and Steel (2012-13) held on 14.06.2013………………………………………………………… 85 7 X Minutes of the Sitting of the Standing Committee on Coal and Steel (2012-13) held on 08.07.2013………………………………………………………… 87 XI Minutes of the Sitting of the Standing Committee on Coal and Steel (2013-14) held on 17.12.2013………………………………………………………… 89 8 COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL(2009-10) Shri Kalyan Banerjee - Chairman Name of the Member Lok Sabha 2. Shri Adhi Sankar 3. Shri Hansraj G. Ahir 4. Shri Jaywant G. Awale* 5. Shri Sanjay Bhoi 6. Shri Abu Hasem Khan Choudhury 7. Shri Ismail Hussain 8. Shri Chandrakant B.Khaire 9. Shri Yashbant Laguri 10. Sardar Sukhdev Singh Libra 11. Shri Narahari Mahato 12. Shri Babu Lal Marandi 13. Shri Govind Prasad Mishra 14. Kumari Saroj Pandey 15. Shri Ramesh Rathod 16. Shri Rakesh Sachan 17. Shri Pashupati Nath Singh 18. Smt. Rajesh Nandini Singh 19. Shri Rajiv Ranjan Singh alias Lalan Singh 20. Shri Shibu Soren 21. Dr. G. Vivekanand Rajya Sabha 22. Ms. Mabel Rebello 23. Dr. Dasari Narayana Rao 24. Shri Jai Prakash Narayan Singh 25. Shri Mohammed Amin# 26. Shri Ali Anwar Ansari 27. Shri R.C. Singh 28. Shri Kishore Kumar Mohanty 29. Shri Swapan Sadhan Bose 30. Vacant^ 31. Vacant$ # Nominated w.e.f. 23.12.2009 vice Shri A. Vijayaraghavan * Nominated w.e.f. 11.01.2010 ^ Shri Dhiraj Prasad Sahu ceased to be Member of the Committee w.e.f. 07.07.2010 $ Shri Nand Kumar Sai ceased to be Member of the Committee w.e.f. 29.06.2010 (iii) 9 COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL(2011-12) Shri Kalyan Banerjee - Chairman Name of the Member Lok Sabha 2. Shri Hansaraj Gangaram Ahir 3. Shri Sanjay Bhoi 4. Shri Udyanraje Bhonsle 5. Shri A.H. Khan Choudhury 6. Shri Bansa Gopal Chowdhury 7. Smt. Jyoti Dhurve 8. Adv.Ganeshrao Nagorao Dudhgaonkar 9. Shri Ismail Hussain 10. Shri Vishwa Mohan Kumar 11. Sardar Sukhdev Singh Libra 12. Shri Govind Prasad Mishra 13. Shri Deoraj Singh Patel 14. Shri Kalyan Singh 15. Shri Pashupati Nath Singh 16. Smt. Rajesh Nandini Singh 17. Shri K. Sugumar 18. Shri Manohar Tirkey 19. Dr. G. Vivekanand 20. Shri Pakauri Lal# 21. Shri Rajiv Ranjan Singh alias Lalan Singh$ Rajya Sabha 22. Shri Jugul Kishore 23. Shri Dhiraj Prasad Sahu 24. Shri Nand Kumar Sai 25. Shri Jai Prakash Narayan Singh 26. Smt. Smriti Zubin Irani* 27. Shri C.M. Ramesh@ 28. Shri Ali Anwar Ansari@ 29. Dr. Pradeep Kumar Balmuchu% 30. Shri Dilip Kumar Tirkey% 31. Vacant * Nominated to the Committee w.e.f. 17.09.2011 # Nominated to the Committee w.e.f. 03.01.2012 @ Nominated to the Committee w.e.f. 04.05.2012 % Nominated to the Committee w.e.f. 15.05.2012 $ Nominated to the Committee w.e.f. 28.06.2012 (iv) 10 COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL(2012-13) Shri Kalyan Banerjee - Chairman Name of the Member Lok Sabha 2. Shri Hansraj Gangaram Ahir 3. Shri Sanjay Bhoi 4. Smt. Jyoti Dhurve 5. Shri Ganeshrao Nagorao Dudhgaonkar 6. Shri Sabbam Hari 7. Shri Vishwa Mohan Kumar 8. Shri Yashbant N.S. Laguri 9. Shri Pakauri Lal 10. Shri Babu Lal Marandi 11. Shri Govind Prasad Mishra 12. Shri Rajaram Pal 13. Kumari Saroj Pandey 14. Shri Gajendra Singh Rajukhedi 15. Shri K.R.G. Reddy 16. Shri K. Shivkumar alias J.K. Ritheesh 17. Shri Pashupati Nath Singh 18. Smt. Rajesh Nandini Singh 19. Shri Uday Pratap Singh 20. Shri O 21. Shri Bansa Gopal Choudhary* Sabha 22. Shri 23. 24. 25. 26. Shri 27. Shri 28. Shri 29. Shri 30. 31. ________________________________________________________________ * Nominated w.e.f. 13.12.2012 (v) 11 COMPOSITION OF THE STANDING COMMITTEE ON COAL AND STEEL(2013-14) Shri Kalyan Banerjee - Chairman Name of the Member Lok Sabha 2. Shri Hansraj Gangaram Ahir 3. Shri Sanjay Bhoi 4. Shri Bansa Gopal Choudhary 5. Smt. Jyoti Dhurve 6. Shri Ganeshrao Nagorao Dudhgaonkar 7. Shri Sabbam Hari 8. Shri Vishwa Mohan Kumar 9. Shri Yashbant N.S. Laguri 10. Shri Pakauri Lal 11. Shri Babu Lal Marandi 12. Shri Govind Prasad Mishra 13. Shri Rajaram Pal 14. Kumari Saroj Pandey 15. Shri Gajendra Singh Rajukhedi 16. Shri K.R.G. Reddy 17. Shri Pashupati Nath Singh 18. Smt. Rajesh Nandini Singh 19. Shri Uday Pratap Singh 20. Shri K. Shivkumar alias J.K. Ritheesh 21. Shri O Sabha 22. Shri 23. 24. 25. 26. Shri 27. 28. Shri 29. Shri 30. Shri 31. (vi) 12 SECRETARIAT 1. Shri S. Balsekhar - Secretary 2. Shri Shiv Singh - Director 3. Shri Arvind Sharma - Additional Director 4. Shri Amrish Kumar - Executive Officer (vii) 13 INTRODUCTION I, the Chairman, Standing Committee on Coal and Steel having been authorized by the Committee to present the Report on their behalf, present this Forty-Ninth Report (Fifteenth Lok Sabha) on "Coal Pricing and Issues relating to Coal Royalty" pertaining to the Ministry of Coal. 2. The Standing Committee on Coal and Steel(2013-14) had selected the subject for detailed examination and report to the Parliament. The Committee (2009-10) were briefed by the representatives of the Ministry of Coal and Coal Companies on 16.07.2010 and took oral evidence on 16.08.2010 and 26.08.2010. The Committee(2011-12) and (2012-13) decided to continue the examination of the subject. The Committee (2011-12) and (2012- 13) took oral evidence of the representatives of the Ministry of Coal and Coal Companies on 20.01.12, 14.06.2013 and 08.07.2013 respectively. 3. The Committee wish to express their thanks to the officials of the Ministry of Coal and Coal Companies for placing before them and in furnishing material/information from time to time as desired by the Committee. 4. The Committee also wish to express their sincere thanks to their predecessor Committees for the significant contribution made by them in the examination of the subject. The Report was considered and adopted by the Committee at their sitting held on 17.12.2013. 5. The Committee place on record their profound appreciation for the valuable assistance rendered to them by the officials of the Lok Sabha Secretariat attached to the Committee. 6. For facility of reference and convenience, the observations and recommendations of the Committee have been printed in bold letters in Part-C of the Report. NEW DELHI; KALYAN BANERJEE 18 December, 2013 Chairman 27 Agrahayana, 1935(Saka) Standing Committee on Coal and Steel (viii) 14 INTRODUCTORY The issue of coal pricing and coal royalty have grabbed a lot of public attention of late and has become significant today, not only form economic, but social and political point of view also.
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