CAG finds Andhra Pradesh's mining lease committee non-functional

This audit examined the functioning of the Mines and Geology Department of the Government of Andhra Pradesh, specifically assessing the effectiveness of mineral revenue accounting, lease management, and the prevention of unauthorized mining for the period 2017-18 to 2021-22.

Who it concerns: Government of Andhra Pradesh, specifically the Industries and Commerce (Mines) Department and the Director, Mines and Geology.

What the auditor found

• The State Mineral Policy (SMP) had not been formulated, depriving the state of a roadmap for sustainable mining and optimal resource utilization.
• Mining plans were approved without proper consideration of United Nations Framework Classification guidelines, leading to inflated mineral reserves and overestimation of mining lease life.
• The Mineral Exploration Research and Innovation Trust (MERIT) fund did not receive the designated 2% of seigniorage fee revenue, and available funds were not fully utilized for exploration.
• The system for granting mining leases was not transparent, with large numbers of applications pending for approval and vital records not maintained.
• The State Coordination cum Empowered Committee, constituted to monitor delays in lease processing, was found to be non-functional.
• Data on inoperative leases lacked consistency, and timely action was not taken to resume these leases, resulting in idled mining areas and potential unauthorized mining beyond lease periods.
• Mining lease deeds were not executed and registered for some leases, causing a loss of revenue to the state exchequer from stamp duty and registration fees.
• CAG recommended that the State Government formulate the State Mining Policy, ensure proper evaluation of mining plans by competent authorities, and evolve an effective mechanism for the collection and utilization of MERIT funds.

Also in the document

• CAG found that the State Coordination cum Empowered Committee, specifically created to minimize delays in mining lease processing, was non-functional.
• CAG reported that mining plans were approved with inflated mineral reserves due to deficient scrutiny and ineffective coordination between departments.
• CAG noted that the absence of a State Mineral Policy deprived the state from identifying and utilizing its mineral resources optimally.