Karnataka urges Centre to ban iron ore exports

Last Updated : 24 July 2010, 08:49 IST
Last Updated : 24 July 2010, 08:49 IST

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Raising the issue of illegal mining at the National Development Council meeting, Karnataka Chief Minister B S Yeddyurappa said despite efforts by various state governments, these problems were persisting across the states.

"A major reason is the indiscriminate export of iron ore and other such minerals. Unless certain curbs are placed on export of iron ore, etc. undue exploitation and illegal mining are likely to continue," he said.

Noting that there was an urgent need to arrest the trend of export of nearly 58 per cent of the iron ore extracted in the country, he said, "We have to find ways and means to create value addition within the country itself rather than blindly exhaust our natural resources through indiscriminate exports".

The Chief Minister said at the recent Global Investor's Meet seven major steel producing companies have entered into Memorandum of Undertaking (MoU) with the state government to set up integrated steel plants with a total capacity of 40 million tonnes per annum.

Even if some of these plants materialise within the next three-four years, the entire quantity of iron ore fines generated in the state could be fully utilised within the state itself, he said.

Yeddyurappa said that the current level of production of iron ore in the state is around 49 million tonnes -- 70 per cent in the form of fines and 30 per cent in the form of lumps.

Yeddyurappa said Karnataka was the first state to introduce a new Mining Policy by which fresh leases and renewals of existing mining leases in respect of iron ore were given only if there was value addition within the state.

While supporting the need for fiscal prudence in managing the government borrowings in a sustainable manner, he said the proposed "one size fits all" approach to fiscal consolidation by mandating uniform three per cent fiscal deficit should be revisited.

As Karnataka could effectively absorb more debt, it should not be denied an opportunity to invest in its future by using the additional borrowings in the growth accelerating infrastructure, he said.

Welcoming Centre's assurance on the compensation for a limited period on the impact of GST on state's resources, the Chief Minister said the finally selected GST rate should not compromise ability of the states like Karnataka with high tax effort.

Noting that 91 per cent of the expenditure on the centrally sponsored programmes was on 20 odd schemes only, he said smaller schemes may be discontinued and the resources transferred to the states.

Yeddyurappa also urged the Centre to desist from insisting on unilateral changes in the agreed MoU on the Bangalore Metro project. The cost and time overruns were often beyond the control of the state government and such conditionalities were unreasonable, he said.

Published 24 July 2010, 08:47 IST

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