Mining scam in India (colloquially Indian mining scam) is a series of widespread scams in various ore-rich states of India, and has generated controversy, which spans encroachment of forest areas, underpayment of government royalties, conflict with tribals regarding land-rights[citation needed]. The spill-over of the effects of legal mining into problems such as Naxalism and the distortion of Indian democracy by mixed political and mining interests, has gained international attention.[1][2]
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[edit]
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 byG. Karunakara Reddy and G. Janardhana Reddy who were ministers in the Government of Karnataka at the time.[3]
Investigation by Income Tax Department[edit]
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.[4][5][6]
Interim Lokayukta report of December 2008[edit]
A report[7][8][9] 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.[10][11][12] 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[13][14][15] 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.