Cash strapped JHADC passes resolution seeking equal share of royalty on coal

Syllad | The Rising MeghalayaApril 15, 2020

: The Jaintia Hills Autonomous District Council (JHADC) has passed a resolution to urge the Governor of Meghalaya to determine the share of royalty on coal between the state government and district council to be in the ratio of 50:50.

The resolution was moved by Leader of Opposition and former JHADC Chief Andrew Shullai during the budget session held on Wednesday. 

“Now therefore, in view of the current situation and also to maintain a sound financial position for the Council in the future, this house resolved to urge upon the Governor of Meghalaya to review and to determine the Share of Royalty on Coal between the State Government and the District Council to be in the ratio of 50:50,” Shullai said.

He said it is evident that the Council is facing severe financial crisis and it has come to a point that it cannot even pay salary to its employees for the last six months. 

According to him, soon, it will reach a stage that there will not be sufficient funds to meet the daily administrative expenses. It already has many pending liabilities relating to the employee’s TA, arrear on salary, gratuity of pensioners and other expenses. 

“The Council is in grave danger if there is no proper financial planning to solve the current situation it is undergoing,” he stated. 

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The former CEM said that the maximum revenue of the Council comes from its share of royalty on coal and other minerals. 

He said current Share of Royalty on minerals other than Coal is 40:60 (40% for state government and 60% for District Council), whereas the Share of Royalty on Coal is 75:25 (75% for State Government and 25% for concerned District Council). 

“The reduction of District Council Share on Royalty on Coal was done base on the order dated February 14th 1995 “Sharing of Royalty on Coal Between the Government of Meghalaya and the District Councils – Determination by the Governor under Paragraph 9 (2) of the Sixth Schedule to the Constitution of India”, passed by the then  Governor of Meghalaya, Madhukar Dighe. This has subsequently reduced the revenue of the Council,” he said. 

Stating that mining of coal will be resuming in accordance with the Mines and Minerals (Development and Regulation) Act, 1957 and auction of existing coal will also start in due course, Shullai said, “As and when the mining of coal resumed and auction of existing coal started, huge amount of royalty will have to be paid by the concern miner. So, therefore, it is very important that the JHADC should get maximum of its share during this period, for its survival and existence.” 

He said that the Governor has the power to determine the share of royalty on coal between the District Council and the State Government. Paragraph 9 (2) of the Sixth Schedule to the Constitution of India, provides that “If any disputes arises as to the share of royalties to be made over to a District Council, it shall be referred to the Governor for determination and the amount determined by the Governor in his discretion shall be deemed to be the amount payable under sub-paragraph (1) of this paragraph to the District Council and the decision of the Governor shall be final.”