The Context
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was passed by Parliament amid Opposition protests. A key provision seeks to restrict States from imposing additional taxes, cesses or levies on mineral rights and mineral-bearing lands. The move is significant in light of the Supreme Court’s 2024 Mineral Area Development Authority v. SAIL judgment, which recognised the power of States to tax mineral rights.
Why are Minerals Important?
Minerals are critical for:
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- Infrastructure
- Manufacturing
- Defence
- Renewable energy
- Electric vehicles
- Semiconductors
Critical minerals such as lithium, cobalt, nickel, graphite and rare earth elements are increasingly important for India’s strategic autonomy.
Thus:
Mineral security is becoming a component of national security.
Key Objective of the Bill
The Bill seeks to:
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- Reduce excessive State-level mineral levies.
- Improve investment attractiveness.
- Accelerate exploration and mining.
- Strengthen critical-mineral supply chains.
- Reduce import dependence.
The broader objective is:
Exploration → Mining → Processing → Manufacturing → Recycling
Federalism Dimension
The Constitution distributes mineral-related powers between Centre and States.
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- Entry 54, Union List: Regulation of mines and mineral development.
- Entry 50, State List: Taxes on mineral rights.
- Entry 49, State List: Taxes on lands and buildings.
The Supreme Court’s 2024 MADA v. SAIL judgment held that:
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- Royalty is not a tax.
- States have taxation powers over mineral rights.
- Parliament can impose limitations within the constitutional framework.
Why are States Concerned?
Mineral-rich States such as Odisha, Jharkhand and Chhattisgarh argue that excessive restriction may:
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- Reduce fiscal autonomy.
- Affect State revenues.
- Weaken cooperative federalism.
- Limit resources available for addressing mining-related social and environmental costs.
Environmental & Tribal Concerns
Mining can cause:
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- Deforestation
- Pollution
- Displacement
- Groundwater depletion
- Biodiversity loss
Many mineral-rich areas are also tribal regions.
Therefore, mining policy must respect:
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- Fifth Schedule
- PESA, 1996
- Forest Rights Act, 2006
- Gram Sabha participation
- District Mineral Foundation (DMF)
Way Forward
India needs:
1. Cooperative Federalism
Balance national mineral security with State fiscal interests.
2. Sustainable Mining
Promote mine reclamation, circular economy and environmental restoration.
3. Resource Justice
Ensure affected communities receive a fair share of mineral wealth.
4. Greater Value Addition
Move from raw mineral extraction towards domestic processing and manufacturing.
5. Critical Mineral Strategy
Strengthen exploration, recycling and international supply chains.
Conclusion
India must transform its mineral wealth into strategic and economic strength without compromising federalism and environmental justice. “The goal should not be more mining at any cost, but more responsible mining, greater value addition and fairer distribution of mineral wealth.”
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