Skip to main content

Govt eases rules for auction of mineral blocks

Govt eases rules for auction of mineral blocks
New mining rules to allow wider participation, ensure auctions are not called off for want of biddersIn an attempt to generate fresh interest from miners for auctions of mineral blocks, the government has amended the rules to allow wider participation and reduce the chances of auctions getting called off for want of bidders.
A statement from the ministry of mines said on Friday that the Mineral Auction Rules were amended on Thursday, a move expected to enhance investor participation in future auctions.About 34 mineral blocks across six states have been chosen for auction by the end of the current fiscal year, the statement said.
Poor investor interest due to subdued commodity prices and tighter rules led to the cancellation of about 60 auctions since 2015, when auctions replaced administrative allocation of mineral blocks.The National Democratic Alliance government had introduced auctions to remove the element of discretion in the allocation of natural resources.
So far, 33 blocks have been auctioned, which could fetch Rs1.28 trillion for states over the lifetime of the lease.The statement said the 34 blocks to be auctioned in the states of Chhattisgarh, Gujarat, Maharashtra, Odisha, Rajasthan and Telangana are expected to fetch an additional revenue of Rs75,000 crore for states. States get royalty on the production of minerals.
As per the changed rules, auctions will not be cancelled if there are fewer than three bidders from the second round onwards. Earlier, three bidders were required up to the third round for an auction not to be cancelled.
“While a minimum of three bidders is still stipulated in the first attempt to auction, in the amended rules states have the flexibility of allocating the block in the second round itself even if there are less than three bidders. This will make the auction process less cumbersome and will help states auction mineral blocks quickly,” the statement said.
The revised rules also sharply reduce the net worth requirement for eligible bidders from Rs4 crore to Rs50 lakh for blocks with average annual production of up to Rs2 crore. It has been slashed from Rs40 crore to Rs10 crore in the case of mines, with average annual production of up to Rs20 crore, the statement said.
The end-use conditions of the mineral output have also been relaxed. The rules, however, discourage successful bidders from squatting on leases without mining, the statement added.
The Mint, New Delhi, 2nd December 2017

Comments

Popular posts from this blog

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

Differential Tax Levy under GST:Food Firms May De-Register Trademarks The government’s decision to charge an enhanced tax rate on trademark food brands is leading several rice, wheat and cereal manufacturers to consider de-registering their product trademarks. Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers and bearing registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries. Sources say that the move has affected the packaged rice industry the hardest and allowed the un-registered market leaders, India Gate and Daawat, to gain advantage as compared to other registered brands such as Kohinoor and Lal Qilla. Smaller players are even more worried with this enhanced rate of tax (against the otherwise …