Does centralising control over mineral-bearing land taxation strengthen or weaken cooperative federalism? Discuss with reference to the MMDR Amendment Act, 2026.

The Mines and Minerals (Development and Regulation) Amendment Act, 2026 — introduced in the Lok Sabha on 10 August 2026 and passed by Parliament on 13 August 2026 [1] — bars States from levying any tax, cess or levy on mineral rights or mineral-bearing lands except on conditions prescribed by the Centre. Coming barely two years after the Supreme Court's nine-judge ruling in Mineral Area Development Authority v. SAIL (2024) upholding States' taxing power under Entries 49 and 50 of the State List [2], it strengthens regulatory uniformity but strains fiscal federalism.

How centralisation strengthens cooperative federalism

• Creates a uniform, predictable fiscal regime in place of multiple, uneven State levies, lowering the cost of capital for a sector where lease periods run for decades [1].
• Aids national strategic goals: royalty rationalisation for 24 critical and strategic minerals — including Cobalt, Gallium, Lithium and Vanadium — enables first-time auctions and supports the net-zero-by-2070 energy transition [3]. Supply-chain security is a shared, not State-specific, interest.
• Parliament's power flows from Entry 54, Union List read with Entry 50, which itself permits "limitations imposed by Parliament" — so the Act operates within, not against, the constitutional scheme.

How it weakens cooperative federalism

• Erodes an own-revenue source of mineral-rich but income-poor States — Odisha, Jharkhand, Chhattisgarh — deepening dependence on central transfers.
• Effectively neutralises a judicial verdict in the States' favour by invalidating pre-commencement dues, converting a settled constitutional question into a political one [1].
• Central "prescribed conditions" leave State fiscal autonomy contingent on executive rule-making, not law — with no consultative forum built in.
• Enacted without evident recourse to the Inter-State Council (Art. 263) or GST Council-style bargaining, it substitutes command for consensus.

Centralisation here buys predictability at the price of consent. The balance can be restored by routing mineral-levy conditions through the Inter-State Council, offsetting States' revenue loss via a Finance Commission-recommended share, and strengthening District Mineral Foundations — making mineral governance genuinely a matter of "cooperative", not coercive, federalism.