The MMDR Amendment Act, 2026 marks a shift toward fiscal centralisation in India's mining sector. Discuss its implications for cooperative federalism.

In Mineral Area Development Authority v. SAIL (2024), a nine-judge Bench held by 8:1 that the power to tax mineral rights and mineral-bearing land vests in State legislatures, with royalty not being a tax [2]. The MMDR Amendment Act, 2026 curtails precisely this power, making the shift fiscal, not merely regulatory.

How the Act centralises fiscal space

• Bars States from imposing any tax, cess or levy on mineral rights or mineral-bearing lands except on terms set by the Centre [1].
• Extends Union regulation beyond mines to "mineral-bearing lands", identified by centrally prescribed parameters [1].
• Declares pre-commencement unpaid dues invalid while not refunding amounts already collected — eroding the revenue States expected from the instalments the Court permitted from 1 April 2026 [1][2].
• Continues a trajectory: the 2015 amendment's auction mandate, DMF and NMET [3], and the 2025 removal of prior central approval for auctioning iron ore, bauxite, limestone and manganese blocks [4].

Where it strengthens cooperative federalism

• A uniform, predictable levy regime removes post-investment surprises that raised mining costs and discouraged extraction [1].
• Steadier output benefits mineral States through royalty and DMF flows tied to production [3].
• Assures mineral security for the steel value chain, where PSUs like SAIL depend on captive iron ore.

Where it strains it

• Legislative reversal of a constitutional verdict on State fiscal autonomy, without a visible consultative process, signals unilateralism.
• Mining States such as Odisha, Jharkhand and Chhattisgarh bear land degradation and displacement costs yet lose an autonomous revenue handle.
• Centre-defined "mineral-bearing land" confers wide discretion over a subject touching land, a State subject.

Fiscal uniformity and State autonomy are not irreconcilable: a consultative mechanism under Article 263 or a GST Council-type forum for prescribing levy parameters, coupled with transparent compensation for extinguished dues and stronger DMF utilisation, can deliver investor certainty while honouring the federal bargain the Court affirmed.