The Great Goan Robbery

Under the Constitution of India, the people of Goa are the owners of all the iron, manganese and bauxite ores in the State. The Goa government is only a trustee and guardian, to ensure their use in the best possible way, and for the welfare of all.

Supreme Court Confirms Constitutional Position

In its far-reaching judgement on the 2G scam, the Supreme Court held that all public resources — which governments may want to give for commercial use — must be subject to auction or should be disposed of so as to get the maximum possible earnings for the public exchequer.

From 2004 to 2012, Goa exported about 282 million tonnes of iron ore to China, valued at Rs.87,748 crores. Of this amount, Rs.33,914 crores was spent on extracting the ore and for legitimate 20% profit.

However, instead of getting Rs.53,833 crores, i.e. the full value of the ore, the Goa government earned only Rs. 2,387 crores, a paltry 4 per cent of the total value of the ore exported.

Where did the rest of the money go?

Mining companies earned Rs.32,381 crores, 60% of the ore value.

The Central government received Rs.19,065 crores, about 35% of the ore value, as Income Tax and Export Duty.

This unjustifiable swindle has reduced our collective wealth by Rs.53,833 crores--the equivalent of the Goa government's revenue of 10 years. The owners of this ore, i.e. the people of Goa and its future generations, have lost this money forever.

Of the 282 million tonnes of Iron Ore extracted from 2004-05 to 2010-11

  • Sold for (Total Value) Rs.87,748 Crore
  • Value after Expenses Rs.53,833 Crore
  • To Mining Companies Rs.32,381 Crore
  • To Goa Government Rs.2,387 Crore

The Past 2004-05 to 2010-11

282 million tonnes of iron ore extracted and sold for 87,748 Cr How much of this value did the people of Goa get?
"Captured" value of ore 53,833 Cr
Mining Expenses 33,914 Cr
2,387 Cr (4%) to Goa Govt
65% to Miners 32,381 Cr
32% to Central Govt 19,381 Cr

The Future 1.3 billion tonnes of iron ore worth 404,460 Cr remain

"Captured" value of ore 240,136 Cr
Mining Expenses 156,324 Cr
10% (40,446 Cr) to Permanent Fund, as directed by Supreme Court
Who keeps the rest?
(182,876 Cr)

The Goa Foundation's proposal is that all of it should go to the Goenchi Mati Permanent Fund

Our proposal is that henceforth all money from mining (including mining of dumps) should go to the Goenchi Mati Permanent Fund. All monies generated from the sale of illegally extracted ore should also be deposited in the Permanent Fund.

The Permanent Fund will have its own administrator, independent of the Government of Goa. His/her main task will be to conserve the fund and increase its value through sound investments.

The Goa Foundation believes that the income from the Fund should be utilised for the welfare of Goa's citizens in the form of clearly defined entitlements relating to educational opportunities, health facilities and housing sites for newly wed Goan couples and for rehabilitating those environments that have been badly damaged by mining operations.

The potential value of the Goenchi Mati Permanent Fund today:

Goa's known iron ore reserves are estimated at 1.3 billion tonnes. Assuming we extract all of it, sell at the average historical rate and capture 90% of the value, we earn Rs.223,322 crores.

Rs.223,322 crores is the value of our ore and the potential value of the Goenchi Mati Permanent Fund as of today.

As per Census 2011, Goa has a population of 14.5 lakhs. Accordingly, the division works out to assets of about Rs.15 lakhs to each Goan, or Rs.61 lakhs for a family of four. The real income on this will be available to our descendants in perpetuity.

At a 3% rate of interest (after adjusting for inflation), Goa would get Rs.6,700 crores every year, without any mining.

If Goa had set up the Goenchi Mati Permanent Fund in 2000, the liquid cash value of the fund today would be worth at least Rs.20,000 crores or Rs.5.5 lakhs per family of four.

Potential fund value

Extracting and selling 1.3 billion tonnes of ore at Rs.1,909 a tonne, at a 90% capture rate

Rs.223,322 Crores
Goenchi Mati Fund size after 10 years

Rs.3,436 Cr annual captured value at extraction rate of 20 million tonnes/year,

Rs.34,357 Crores
Annual income to Goa government after 10 years

Interest on value of extracted ore at 20 million tonnes/year

Rs.1,031 Crores
Annual income to Goa government after ore is exhausted

3% interest on Fund value of Rs.223,322 Crores

Rs.6,700 Crores
Per household fund value

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