New Delhi, Aug 21 (KNN) In a move which will increase annual revenue collection of mineral rich states but would pass on the cost burden to small and medium enterprises, the government has given approval to raise the royalty rates for 33 minerals.

Royalty is a tax levied by the government on mining, in lieu of transfer of ownership rights of mines.

The prices of steel, aluminium, iron ore, bauxite are likely to be hiked now, increasing the input price for mineral based industries.

The Cabinet, chaired by Prime Minister Narendra Modi, has approved hiking the royalty for major minerals like iron ore to 15 per cent. The proposal before the Cabinet was also to hike the rate of phosphates to 12.5 per cent from 11 per cent, metallurgical bauxite to 0.6 per cent from 0.5 per cent and lead from 1.7 per cent to 14.5 per cent. The hike excludes coal and lignite and sand stowing.

"Cabinet in-principle approved revision of mineral royalty. There are 55 such items but this excludes coal, lignite and sand for stowing," Communications and IT Minister Ravi Shankar Prasad said after the Cabinet meeting yesterday.

"We are satisfied that revision has been done... It has not been revised for a long time," he said, without disclosing the impact of the move in financial terms.

The earlier revision, in 2009, was when the government shifted to an ad valorem (percentage) basis of charging royalty.

The move is expected to increase the annual revenue collection of mineral rich states like Chhattisgarh, Odisha, Jharkhand, Karnataka and Goa, etc. (KNN/SD)