Group of Ministers okays revenue share plan for mines

The Group of Ministers (GoM) looking at mining regulation is learnt to have accepted the mining ministry’s direct revenue stream (DRS) proposal, “to put purchasing power in the hands of the affected people”.

The idea of DRS is expected to ensure “regular and reasonably predictable amount” in the hands of the tribals so that they can take independent decisions while planning their future economic investment and expenditure.

The DRS formula was worked out after the mining ministry expressed concerns on the model of distribution of mining companies’ profits.

Under the formula, mining firms will share 26% profits or the previous year’s royalty paid, whichever is higher, with the locally affected people.

The funds will be managed by the District Mineral Foundation, which will ensure equitable distribution within the district as per the scheme of entitlements to be devised by the state governments.

The surplus money collected by the foundation can be used for community infrastructure creation, the ministry proposed.

In a presentation made to the GoM ahead of the September 17 meeting, the mining ministry said “pure equity based schemes, linking affected population to the mine, may lead to widespread disparities in compensation even within one district and may lead to unintended social and other consequences.”

The GoM has to meet again in the coming weeks to finalise the details of the draft that will go to the Cabinet and be then tabled in Parliament, perhaps in the winter session.