Much-needed respite for granite industry

Ongole: The decision of government of Andhra Pradesh to reduce the rate of collection of district mineral fund from 30 percent to 12.5 percent is going to help the galaxy granite industry which is facing a hard time in the state for the past few months.

It is a regular practice to the government to revise the royalty for the minerals for every three years. In September 2015, the government enhanced the royalty for granite for 25 percent, which became a burden for the granite industry.

At the same time, the central government proposed all the states to constitute District Mineral Foundation to take up various programs for overall development of the persons and the area whose ecology has been degraded by the rampant mining.

Every mining lease holder in the district should pay fraction, not more than one third, of the royalty, as stipulated by the state government from time to time.

On March 14, 2016 the Government of AP issued GO No 36 and ordered the granite quarries to pay 30 percent of the royalty to the District Mineral Fund.
In the Prakasam district, there are about 1400 quarries and 4000 polishing and processing units with more than 50000 dependent workers.

The quarries produce about 25000 cubic meters of galaxy granite and pay Rs. 3500 as royalty per square meter. In addition to the royalty, Rs. 1050 will be paid as DMF to mineral foundation. The district gets 8.75 crore per month as royalty and Rs. 2.62 crore per month in the name of DMF.

Unable to meet the expenses and pay the royalty and DMF, the granite quarries forwarded a part of the burden to the processing units and factories. As there are a very less number of orders in the domestic market and unable to cope up with the demonetization affect, the factories owners called for a shutdown of processing units and met the Chief Minister.

On the other side, the Federation of AP Granite Quarry Owners also sent representations to the chief minister, who appointed a committee to look into the matter. Considering the recommendations of the committee, the state government issued GO No 30 on Thursday reducing the rate of DMF from 30 percent to 12.5 percent.

MA Azeem, general secretary of the Galaxy Granite Owners Association said, “The GO has come as a big relief to the galaxy granite industry which is in distress. With this, the quarries can save about Rs. 1.5 crore in the DMF and pay just Rs. 1.1 crore to the government every month and Rs. 18 crore burden reduces per year.

The saved money can help us reduce the price of the stone and helps the factories purchase more granite and pay the workers. We are expecting good days to the granite industry coming in future.”

Srinivasa Rao, owner of Sai Granites in Chimakurthy said, “We are paying about Rs. 2000 as a share of royalty and DMF to the quarries in addition
to the granite price. The latest decision of government is a relief and we are expecting a reduction of about Rs. 800 from now on.”