Indian draft Mines and Minerals (Development and Regulation) Act added new provisions requiring non-coal mining companies to contribute 100% of their royalty to the proposed District Mineral Foundation, and coal mining companies to contribute 26% of their profit to the Foundation. According to the Federation of Indian Chambers of Commerce and Industry (FICCI) this requirement has put the mining sector under tremendous pressure.
As mentioned by FICCI the proposed profit sharing of 26% for coal and 100% royalty for other minerals, the tax outgoings will go beyond 60%, while the percentage is between 40-45% at present. The Federation believes that new provisions will make the domestic mining and mineral based industry globally uncompetitive. At the same time will hamper the growth and employment potential of the mining industry and discouraging investments in this field.
