Economic and Financial Issues

a. Federal management of natural resources

Revision of Royalty Rates on Coal

The West Bengal Government has blamed the

Centre for its partisan behaviour and for denial

of coal royalty amounting to over Rs 4,800 crore.

The new revised royalty rates will be announced

early in 2011. A new study group has been

constituted under the Chairmanship of the

Additional Secretary to the Ministry Of Coal, Alok

Petri, for considering the issue of next revision of

royalty rates of coal and lignite. The royalty rates

on coal and lignite were last revised wef August

1st 2007.

http://www.blonnet.com/2010/12/07/stories/

2010120750800400.htm

Allocation of Coal Blocks

The West Bengal Government has been

negotiating with the Centre on the issue of

allocation of coal blocks. In spite of having a good

coal reserve, the State has no say in the allocation

because it is in the Union list. Delay in allocation

of coal blocks can repel industries away from the

State. The issue was raised during the Assocham

summit on ‘West Bengal: The Investment

Destination’ at Kolkata on 5th January 2011.

On coal block allocation policy see:

http://www.thehindubusinessline.com/2010/

08/22/stories/2010082252350100.htm

http://www.business-standard.com/india/

news/centre-to-review-coal-block-allocationpolicy/

397002/

b. Climate Change: The Carbon Tax

In context of the rising concern with climate

change and the externalities from greenhouse

gases, the ‘carbon tax’ has emerged as a major

issue in federal taxation worldwide. Developed

countries favour imposing a carbon tax on imports

as a punitive measure against developing nations

refusing to put in place the measures such as

carbon tax and cap-and-trade schemes intended

to control carbon emissions.

India has said a firm ‘no’ to the proposed

carbon tax by western countries. India has chosen

to levy non-shareable Cess instead of shareable

carbon tax from FY 2010-11 onwards. The “clean

energy cess” will be imposed on coal produced in

India as also imported at a nominal rate of Rs.50

(USD $1.10) per ton.

The Government of India has announced the

establishment of a National Clean Energy Fund

(NCEF) for funding research and innovative

projects in clean technologies. For further details

see http://

www.indiaenvironmentportal.org.in/files/

India%20Taking%20on%20Climate%

20Change.pdf

The Ministry of Environment and Forests.

http://www.indiaenvironmentportal.org.in/

taxonomy/term/5100)

The MoEF has blocked/delayed the following

projects due to violations of environment and

forest laws by the companies: