Discuss how the MMDR (Amendment) Act, 2026 alters the fiscal federal balance between the Centre and mineral-rich States. Examine its constitutional validity in light of the 2024 Supreme Court ruling in MADA v. SAIL.

The nine-judge Bench in Mineral Area Development Authority v. Steel Authority of India (2024) held that royalty is not a tax and that States retain competence to tax mineral rights under Entry 50, List II [3]. The Mines and Minerals (Development and Regulation) Amendment Act, 2026 recalibrates this settlement in the Centre's favour, making its federal balance and constitutionality both contestable.

How the fiscal federal balance shifts

• Section 9D bars State Governments from imposing any tax, cess or levy on mineral rights or mineral-bearing land — whether computed on quantity, value or royalty — except as per conditions prescribed by the Centre [1].
• Rule-making power moves to the Union executive through the new clause in Section 13, so the scope of State levies is now set by Central rules rather than State legislatures [1].
• Retrospective effect: levies unpaid or uncollected before commencement are invalidated, while amounts already recovered are not refundable [1] — a direct revenue loss for mining States like Odisha, Jharkhand and Chhattisgarh, which bear displacement, environmental and infrastructure costs.
• The Centre's stated aim is a uniform, predictable fiscal framework to sustain long-gestation mining investment [2].

Constitutional validity — two views

• Supporting the Act: Entry 54, List I allows Parliament to regulate mines in the public interest; Entries 49 and 50 are expressly subject to "any limitations imposed by Parliament by law relating to mineral development," which Section 9D arguably enacts [3].
• Against: MADA confined such limitation to genuine mineral-development purposes; a near-total prohibition operated by executive rules risks denuding a State List entry, offending federalism as part of the basic structure, with retrospectivity adding an arbitrariness challenge.

The Act therefore secures uniformity but at the cost of States' fiscal autonomy. A cooperative route — a GST Council-style consultative mechanism, with a levy ceiling fixed in the statute itself and strengthened District Mineral Foundation flows — would reconcile investor certainty with the constitutional stake of mineral-bearing States.