Do you know what is the loss of revenue to government due to illegal mining activities from just 90 cases during 2005-06? A whopping Rs 716.39 crore!

This is just a tip of the iceberg, as this loss was detected in just 90 cases during the audit conducted by the Comptroller and Accountant General of India (CAG), the report of which has been submitted to the Legislature.
With the loss of over Rs 700 crore being detected during the verification of records pertaining to just 90 cases randomly selected for the audit, one could imagine the magnitude of illegalities and loss of revenue to the government in the mining sector in Karnataka.

While blaming lack of coordination between the Land Revenue and the Mines and Geology Departments for continuation of illegal mining activities in the State, the report said that such lacunae has cost Rs 284 crore to the government. The CAG has also pointed out that the State government has failed to frame rules under the Mines and Minerals (Development and Regulation) Act for prevention of illegal mining, transportation and storage of major minerals. The report said that though the Union government had empowered the State to frame rule in this regard during 1999, Karnataka has not yet acted concretely except preparing a draft rule during August 2006.
Stating that the prevailing mechanism to monitor extraction and despatch of minerals is not adequate to ensure proper assessment and levy of royalty and interest, the report found that lack of coordination among various departments and failure of the Mines Department to check loss or leakage of revenue through illegal extraction or exploitation of minerals has led to loss of revenue in stamp duty, royalty, value of minerals, penalty, etc to the Government.

The CAG scrutiny has also revealed that the Mines Department has no proper system to regulate, to check correctness of quantity of mineral removed or transported from quarries.  Even the trip-sheet booklets have not been maintained in the department for verification of quantity of minerals removed or transported by the mining lessees.

Another startling revelation was that of the 206 mining lessees 162 had not installed weighing machines since 1998 and the department had done nothing to forfeiture their security deposit. This finding has proved that such miners were transporting minerals without weighing and apparently showing some quantity to the government.
Another laxity on the part of Mines Department was that it did not take any action against 5,703 mining lessees, who were granted licenses during 2000-01 to 2004-05 for quarrying building stones, though they had not submitted quarterly or annual returns as per the Karnataka Minor Mineral Concession Rules.