Odisha's Mining Department Under Fire for Massive Revenue Losses
A recent Comptroller and Auditor General (CAG) report has exposed severe lapses in Odisha's steel and mines department, leading to a staggering loss exceeding Rs 250 crore for the state exchequer. The audit highlights systematic failures in oversight, including overlooking illegal mining activities, neglecting to increase dead and surface rents, ignoring delayed royalty and premium payments, and failing to amend lease deeds even after production limits were enhanced.
Critical Audit Findings and Financial Implications
The performance and compliance audit report for 2022-23, tabled in the state assembly on Tuesday, reveals specific instances of revenue leakage. Scrutiny of records from the deputy director of mines in Baripada showed that the lessee of Badampahar iron ore mines extracted 14.94 lakh metric tonnes of ore in 2019-20 against an environmental clearance limit of 13.05 lakh metric tonnes. This excess production of 1.89 lakh metric tonnes should have attracted a payment of Rs 40.67 crore, but no demand was raised by authorities.
Similarly, in the Joda mining circle, the lease deed was not amended even after the production limit in the mining plan was enhanced—first to 1.5 million tonnes per annum in 2019 and later to 30 million tonnes per annum in March 2021. This failure to update the deed resulted in non-levy of stamp duty and registration fees worth Rs 122 crore.
Inconsistencies in Rent Calculations and Unrealized Interest
The audit uncovered significant inconsistencies in calculating surface rent, which mining lease holders pay to the government for using land surface areas. While the joint director of mines calculated annual surface rent at Rs 10.75 lakh using lower rates applicable to non-revenue land, the Barbil tehsildar assessed it at Rs 83.08 lakh, considering revenue-assessable land at market rates. This discrepancy led to a differential royalty and surface rent amount of Rs 1,742.84 crore, on which stamp duty and registration fees should have been levied but were never acted upon.
Furthermore, interest amounting to Rs 90.61 crore on delayed payments of royalty, premium, District Mineral Foundation (DMF), National Mineral Exploration Trust (NMET) contributions, and dead rent—the annual payment lease holders must make regardless of mining activity—was not realized. The audit found that five lessees paid Rs 1,854.77 crore towards mining revenues between June 2020 and August 2022 for dues pending since 2014, with delays ranging from 44 to 2,367 days. Despite these extensive delays, concerned authorities failed to levy interest on any of the payments.
Additional Revenue Losses and CAG Recommendations
In two mining circles, the department also neglected to levy dead rent of Rs 2.55 crore against ten lessees and surface rent of Rs 93.71 lakh against nine lessees for the period from July 2020 to December 2022. This oversight contributed to an additional revenue loss of Rs 3.49 crore.
The CAG has urgently recommended that the department immediately recover all outstanding dues, activate automated demand-and-interest systems to prevent future lapses, amend lease deeds without delay, and strengthen monitoring mechanisms in district mining offices. These measures are crucial to plugging the revenue drain and ensuring proper governance in Odisha's mining sector.
