The latest scam that has come out is the Coal Mining Scam in which Government has had a presumable conservative loss Rs1.86 trillion (short scale), due to the delayed implementation of competitive bidding process for allotment of coal blocks, says the CAG.
Illegal Iron ore mining in Karnataka
Rising global iron-ore prices driven by Chinese demand brought focus to the iron ore rich Bellary region of Karnataka. This iron ore is alleged to have been illegally mined after paying a minuscule royalty to the government. The major regularities involve mines in Bellary, including those of Obulapuram Mining Company owned by G. Karunakara Reddy and G. Janardhana Reddy who were ministers in the Government of Karnataka at the time.Investigation by Income Tax Department
Income tax sleuths unearthed under-invoicing and tax evasion of around Rs 86 crore by the Obulapuram Mining Company (OMC), run by Karnataka's Reddy brothers and also their trusted confidante and state health minister B Sriramulu. A team headed by the Additional Commissioner of Income Tax raided the premises of over 10 people. The team consisting of around 150 officials and companies of Central Reserve Police Force swooped down in the wee hours and conducted raids until late in the night. Income tax officials described it as one of the biggest IT raids in the recent history. The team of officers under the Directorate General of Income Tax Investigation after getting clues to tax evasion by OMC B N Mohan IRS, Deputy Commissioner of Income Tax, Dr Sibichen K Mathew IRS, Additional Commissioner of Income Tax and G M Belagali IRS (Commissioner) of Bangalore (Commissionerate) Central circle were assigned to work on the case. They found that the OMC had entered into a MoU with a one-dollar company of Singapore to camouflage the company's income suppression leading to money laundering and tax evasion. This report was billed as the best investigation of the year and recorded in the book Let us Share by the Finance Ministry. This report was the basis of the Central Bureau of Investigation investigation and the Santhosh Hegde Report.Interim Lokayukta report of December 2008
A report published by the LokAyukta uncovered major violations and systemic corruption in mining in Bellary, including in the allowed geography, encroachment of forest land, massive underpayment of state mining royalties relative to the market price of iron ore and systematic starvation of government mining entities. Justice N. Santosh Hegde resigned from the Lokayukta position on 23 June 2010 citing inability to be effective in his anti-corruption mandate owing to a non-cooperative Government of Karnataka. In January 2010 Mr Kharge questioned the governoment about transfer of Dileepkumar PCCF who refused to sign the report but Government brought S Nagaraja as PCCF who signed the report.Collusion of officials and politicians in permitting illegal mining
Environment Ministry officials state that the 49.97 lakh tonnes of sand mining reported in the Indian Bureau of Mines Year Book for 2011 is a gross underestimate. The guidelines under the Central and the state enactments, call for a sketch of the mining area when a mining lease is applied for. It was found by the Lokayukta that sometimes the actual mining areas are not related to the sketch given with the applications without officials crosschecking them. Further mining applicants falsely claim a prohibited forest area as a revenue area. Finally the actual area of the mine is much bigger than the claimed area. The Indian Bureau of Mines rules which control the type of mining, allow a maximum mining depth six metres to prevent environmental degradation. But miners have flouted this rule to over-extract iron-ore. For example, if they are allowed to take 100 metric tones, mines take 1,000 metric tonnes. Officials at road check posts reportedly collude in a massive under-counting of lorries and trucks transporting the iron-ore from the Bellary mines to the ports. News reports suggest that only 200 trucks are reported as against 4000 plying everyday.Underpayment of royalties to state
There is a huge difference in the market price of the ore and the royalty specified by the government as well as faulty measurement mechanisms of amount of ore extracted. It was found that 3.5 million tonnes of ore were illegally exported without paying a rupee of royalty to the exchequer, resulting in a loss of about Rs160.85 billion.With ore prices of USD 100–120 per ton, 3.5 Million tonnes adds up to about 350–4000 Million USD. There are proposals to link the royalties to the market price of iron-ore. There is also a proposal by the ministry of Environment and Forests to levy a tax.Environmental damage
According to the Lok Ayukta Report,there have been severe ecological changes due to illegal mining. Certain species of animals, like the sloth bear, that in the Bellary region have disappeared. Medicinal plants from the area do not grow any more. The entire system of rain has changed in the district of Bellary. It is reported that the entire area surrounding the mining area is denuded of greenery and has no agricultural activity.SOURCES :
- Deccan Chronicle News
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