New Delhi, Jul 28 (PTI) Miners' body FIMI has urged the Centre to continue with the present system of average sale price published by Indian Bureau of Mines (IBM) which it says is the most effective and transparent way to ensure price discovery and revenue to the exchequer.
This comes in the wake of the government earlier stating that it is in the process of developing nation mineral index for various minerals.
'The government may consider continuing with the ASP system,' the Federation of Indian Mineral Industries (FIMI) said in a letter to Mines Minister Pralhad Joshi.
The basic premise of national mineral index (NMI) is that the present statutory payments, including auction premium, royalty, District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) are based on ASP published by IBM.
'We submit that the present system of ASP is a realistic price discovery mechanism, wherein the actual transaction price of top 10 non-captive mines in a state sold at arm’s length basis is captured. In short, ASP is the weighted average of the ex-mine prices of non-captive mines,' FIMI said.
Stating that National Mineral Index is being developed on the lines of the National Coal Index (NCI), which is based on Coal India (CIL) notified prices and auction prices and import prices.
While majority of the coal consumed in the country is for power, which is a regulated sector, all non-coal minerals are consumed for non-regulated sectors such as steel, aluminium, cement, etc.
Considering this fundamental difference of regulated and non-regulated consuming sectors, the methodology of calculation of NMI should fundamentally differ from that of NCI, FIMI stated.
'We also understand that there is a strong attempt by players who have bid unsustainably high auction premiums to include captive sales transactions in NMI....This will help such captive players to report lower than market transactions, which will be captured in NMI, eventually bringing it down and associated statutory payments to the exchequer,' the miners' body said.
The CII on Monday said that the development of the proposed uniform National Mineral Index for all minerals in line with National Coal Index will tackle the ambiguities in the current average sale price regime, resolve irregularities of high ASP of limestone and bauxite (metal).
In line with the National Coal Index, the proposed 'NMI can consider production from all sources of production captive, non-captive mines etc and will give the correct valuation of minerals also effectively addressing concerns of royalty on royalty as done in coal sector,' CII had said in a letter of NITI Aayog Vice Chairman Rajiv Kumar. PTI SID MR MRJ