Critically examine the federal implications of recent amendments to the Mines and Minerals (Development and Regulation) Act, 1957.
Mineral governance sits at a constitutional fault line: Entry 54, Union List lets Parliament regulate mines "in public interest," while Entry 23, State List leaves states a residual regulatory role, and Entries 49–50 ground their taxing power over mineral lands and rights [1][4]. The 2015–2026 amendment cycle, culminating in the MMDR Amendment Bill, 2026, has steadily shifted this balance Centre-ward — defensible on efficiency grounds, but strained on federal ones.
Centralising thrust — federal concerns
- The 2026 Bill, introduced in Lok Sabha on 10 August 2026, inserts a new Section 9D barring states from levying any tax or cess on mineral rights or mineral-bearing land except on Centre-prescribed conditions [1].
- It extends the Act's scope to "mineral bearing lands" under Section 2, expanding Union regulatory reach over a subject states treat as land revenue [1].
- This effectively neutralises Mineral Area Development Authority v. SAIL (2024), where a nine-judge Bench (8:1) held royalty is not a tax and upheld state taxing power over mineral rights [4].
- Mineral belts lie largely in Fifth Schedule and eastern states (Jharkhand, Odisha, Chhattisgarh), so revenue loss falls on states with weak own-tax bases.
- Process deficit: no Bill of the 2026 Monsoon Session was referred to a Standing Committee, thinning pre-legislative federal consultation [1].
The case for uniformity
- Multiple state cesses layered on royalty raise costs and deter investment; a single fiscal regime aids critical mineral security and import substitution [1].
- The 2025 amendment's National Mineral Exploration and Development Trust and mineral exchanges need pan-India uniformity to function [2].
- DMF under Section 9B (2015) and PMKKKY already channel 10–30% of royalty to mining-affected districts, retaining a decentralised welfare channel [3].
On balance, the amendments secure national mineral objectives but do so by contracting a taxing power the Supreme Court had just affirmed. The way forward is cooperative: route such changes through a GST Council-type Centre–State mining forum or Standing Committee scrutiny, and compensate revenue-losing states. Uniformity achieved with states, not over them, best serves cooperative federalism.
Sources
- 1The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 — PRS Legislative Research10 August 2026 introduction, Section 9D bar on state levies, "mineral bearing lands" in Section 2, Entry 54/23 basis, no Standing Committee referral, uniform-regime rationale
- 2The Mines and Minerals (Development and Regulation) Amendment Bill, 2025 — PRS Legislative ResearchNational Mineral Exploration and Development Trust, mineral exchanges
- 3About DMF/PMKKKY — Ministry of MinesSection 9B District Mineral Foundation, 10–30% of royalty contribution, PMKKKY framework
- 4Mineral Area Development Authority v. Steel Authority of India, 2024 INSC 554 (25 July 2024)8:1 holding that royalty is not a tax; state taxing power under Entries 49–50