Report of 2010 - Financial Audit on Mining Receipts of Government of Rajasthan

Date on which Report Tabled:
Fri 26 Aug, 2011
Date of sending the report to Government:
Government Type:
Sector Taxes and Duties,Finance


Minerals are valuable natural resources being finite and non-renewable; therefore, their exploitation is guided by long term national goals and perspectives. Mineral exploration and development is closely linked with the development of economy and upliftment of inhabitants residing nearby. However, a harmony and balance is to be maintained between conservation and development as it intervenes with the environment and social structure. Management of mineral resources is the responsibility of both the Central Government and the State Governments in terms of entry 54 of the Union list (List I) and entry 23 and entry 50 of the State list (List II) of the seventh schedule of the Constitution of India.

Receipts from mines and minerals mainly consist of royalty which is levied either on specific or ad valorem basis on the quantity of mineral removed or consumed from mines. Dead rent is levied on the area leased out for mining activity. Other receipts for Mining Department are excess royalty collection, application fee, licence fee, permit fee, development charges, prospecting charges, penalties and interest for delayed/belated payments of dues etc. Rates of royalty and dead rent in respect of major minerals are prescribed by the Central Government but these are collected and utilised by the State Government; whereas, rates of royalty and dead rent in respect of minor minerals are determined by the State Government and their collection and utilisation is done by the State Government.

Rajasthan is one of the top nine minerals producing states. It has more than 90 per cent of country's resources of wollastonite, lead, zinc and rock phosphate and is almost the sole producer of calcite and natural gypsum. It has about 64 different kind of major and minor minerals and contributes more than four per cent in national mineral production. We conducted a Performance Audit of Mining Receipts of the period 2004-05 to 2008-09 in order to ascertain whether the provisions of various Acts and rules made thereunder were enforced effectively by the Mining Department. We also ascertained whether there existed an effective system for computation, levy and realisation of various fees, rent, royalty, penalty etc. in the Department; and the action taken in the cases of default or illegal excavation of minerals was effective.

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