New Delhi: The government is planning to remove hurdles to mining in the country by amending the Mines and Mineral Development and Regulation (MMDR) Act 1957.

“It is hopeful that the existing impasse in the coal and mining sectors will be resolved. To facilitate this, changes in the MMDR Act 1957 would be introduced," finance minister Arun Jaitley said in his maiden budget speech.

Jaitley also said the government would revise royalty rates on mining to help state governments earn more. As royalties are generally revised every three years and the last revision was made in August 2009, the government intends to pass the benefit of higher royalties to state governments, he added.

Mines minister Narendra Singh Tomar had earlier said the government will take a view on the MMDR Bill 2011 that provides for sharing of 26% profits with tribal and project-affected people from mining activity. The Bill had lapsed after the previous government failed to get it passed. It envisages a competitive bidding process to encourage the participation of private parties in mining and seeks to empower state governments to set up special courts for the speedy trial of offences relating to illegal mining.

Mineral-rich states such as Orissa, Chhattisgarh and Jharkhand have been seeking higher royalty rates of major minerals such as iron ore, bauxite and manganese ore. The mines ministry has floated a draft cabinet note for inter-ministerial discussions on increasing royalty, in which iron ore royalties are proposed to be hiked from 10% to 15%. The previous United Progressive Alliance (UPA) government had agreed to revise royalties, but did not go ahead with it.