The Union environment ministry's decision to charge a levy for future mining at current rates for destruction of forests is likely to cause a substantial loss of potential revenue for the government.
The levy is charged from any industry or project that requires forest land and accumulates in the Compensatory Afforestation Management and Planning Authority (CAMPA) fund. The fund has collected over Rs 36,000 crore and the government intends to use a large part of it to meet its afforestation target of 10 million hectare under the Green India Mission.
Miners are charged between Rs 4.38 lakh and Rs 10.43 lakh per hectare of forest land but the government has in principle accepted a report that recommends revising the rates to between Rs 5.65 lakh and Rs 55.55 lakh per hectare.
The levy is imposed when a miner seeks clearance under the Forest Conservation Act to use forest land. Earlier, miners used to pay the levy for the land they planned to mine and not the total area under the mining lease. But on April 1 the environment ministry issued a circular asking all miners with forest clearances to deposit the levy for the full area under the lease.
Questions to officials signing the circular did not elicit any response. Queries to the offices of the environment secretary and minister also went unanswered.
Miners have been given up to one year to comply. While this is expected to reduce future costs for existing miners, the potential loss to the government has not been estimated.
The notification says the general approval to hold forest land will not automatically confer the right to mine it. For that, miners will have to apply again for a forest clearance that permits the use of land.
But the levy is charged for use of land and not mere possession. The circular did not clarify if the levy would be returned to miners in case their proposals to dig up forests were not approved.
The ministry has not laid down the process by which approval for holding forest land will be granted. The circular does say the user given possession of forest land shall be responsible for its protection although the administrative control will remain with the state government.
Since the levy was introduced in 2006, over 24,292 hectare of forests have been issued Stage 1 clearances and 27,647 hectare Stage 2 clearances. These clearances are for a part of the leased land held by miners. There is no official estimate of the forest land that will cleared through a general approval.
The environment ministry's move also discriminates between companies with mines and those that are yet to apply for leases.
The new miners will have to pay a higher levy once the new rates are notified even though their mining operations may be carried out at the same time as those with existing mining leases.
An earlier circular under the previous government had required miners to apply for a forest clearance for the entire lease area. Applications for some of these are pending. The new circular also does not say how the applicants caught mid-way will be dealt with.