In so far as Kolar gold mines are concerned, the bulk of the revenue receipts represents the value of the gold produced by the mines at the International Monetary Fund rate of Rs.84.40 per 10 grams. The value is calculated at this rate in view of our obligations to the International Monetary Fund. The difference between the disbursements and the receipts represents the loss sustained by Government. The production of gold in the mines is declining on account of the lower grade of ore now available in the mines. This is a fact of life as far as the Kolar gold mines are concerned.

Shri Akbar Ali Khan : But seven crores expenditure against...

Shri Y. B. Chavan : The expenditure on the mines however has been on the increase on account of the grant of dearness allowance and interim relief to the employees. Provision has also been made in the estimates of 1971-72 for the payment of arrears of bonus to the employees from 1.4.1964. That has also inflated the figures. In view of the low grade of the ore the cost of mining has also increased. This is the economics of the Kolar mines. The only alternative is to close down the operations. Is it for the good of the country? If the current price of gold is taken into consideration the loss will be much less. By working these mines the Government will be in a position to augment its reserves of gold which is very very important consideration. If the mines are closed, 13,000 workers who are employed there will also go out of employment. These are some of the considerations that have to be taken into account.

Hon. Bhai Mahavir also made a mention about the allocation of raw materials that are imported. He has asked what exactly is the basis on which allocations are made because the allocations certainly do create certain jealousies and certain criticisms and lead to blackmarketing. At the present moment broadly speaking these allocations are made on the basis of the installed capacity of the units and their consumption. These are the criteria.

Shri Akbar Ali Khan : His allegation is that all go into the black market.

Shri Y. B. Chavan : I would not say everything is going into the blackmarket. In some cases it may be but as far as the major units are concerned I do not think it is true to say that. I accept there is a likelihood of this happening in some individual cases but to say that the entire thing is going into the blackmarket would be rather exaggerating the whole thing. I am merely explaining the basis. Broadly the Government follows the principle of going by the installed capacity as well as actual use in the recent past to determine the pattern of allocation. For example, in the case of cotton the allotment to units is on the basis of actual consumption in the recent past and the units have the choice of taking one of the previous three years as the base for the purpose of determining the quantum of allotment for the year. If some units surrender the allotment made on this basis, the balance is reallotted on the basis of actual consumption in the immediately preceding year. Now, Sir, Hon. Shri. Bhai Mahavir suggested that this allotment should be linked with sales tax and income tax. It apparently looks to be a very attractive scheme, but the result is going to be that the producers of superfine cloth will get the best advantage out of it. Those who produce inferior quality of cloth, really speaking it is this variety which is meant for the poor man and for mass consumption, will certainly be at a great disadvantage. So, we just cannot afford to take that into account mere income tax or sales tax paid by the unit. Then, again, some suggestion was made that it is better to put it on the basis of the wage bill, but then I am afraid only the inefficient mills, which carry relatively a higher load of labour, will be favoured. So, personally I feel that, by and large, the present position of allotment on the basis of the installed capacity and the actual use in the last year or in the immediate past, seems to be the only rational way of doing it. I hope that somebody discovers a hundred per cent foolproof solution for misuse and blackmarketing. If there are any other ideas which can be suggested, I am sure the Foreign Trade Ministry will take them into account.