UPSC Prelims Practice Questions — Mining amendment is unfair to States
Q1. With reference to the Mines and Minerals (Development and Regulation) Amendment Act, 2026, consider the following statements:
1. It inserts a new Section 9D restraining State Governments from imposing any tax, cess or other levy on mineral rights or mineral-bearing land, whether computed on the quantity of mineral, its value, royalty or otherwise.
2. It amends Section 13 of the parent Act to empower the Central Government to make rules prescribing the conditions or restrictions subject to which such State levies may be imposed.
3. The Bill was introduced and passed by both Houses of Parliament in August 2025 and received Presidential assent in September 2025.
4. Levies that remained unpaid or uncollected before the commencement of the amendment are deemed invalid, and amounts already deposited or recovered are required to be refunded to those who paid them.
Which of the above is/are NOT correct?
- It inserts a new Section 9D restraining State Governments from imposing any tax, cess or other levy on mineral rights or mineral-bearing land, whether computed on the quantity of mineral, its value, royalty or otherwise.
- It amends Section 13 of the parent Act to empower the Central Government to make rules prescribing the conditions or restrictions subject to which such State levies may be imposed.
- The Bill was introduced and passed by both Houses of Parliament in August 2025 and received Presidential assent in September 2025.
- Levies that remained unpaid or uncollected before the commencement of the amendment are deemed invalid, and amounts already deposited or recovered are required to be refunded to those who paid them.
- A. 1 and 2
- B. 2 and 3
- C. 3 and 4
- D. 1 and 4
Q2. The rules laying down the conditions and restrictions subject to which State Governments may impose levies on mineral rights, as contemplated by the 2026 amendment to the Mines and Minerals (Development and Regulation) Act, 1957, are to be framed by which one of the following?
- A. The Union Government acting through the Ministry of Mines, which piloted the amending legislation in Parliament
- B. The Indian Bureau of Mines, the national technical regulator for the mineral sector under the Mineral Conservation and Development Rules
- C. The GST Council constituted under Article 279A, on the recommendation of a three-fourths majority of its weighted votes
- D. The Ministry of Coal, which administers coal and lignite bearing areas and the allocation of such blocks in India
Q3. In Mineral Area Development Authority v. Steel Authority of India (2024), the verdict on the States' power to tax mineral rights was rendered by what strength and margin?
- A. A seven-judge Bench, by a majority of six to one
- B. A nine-judge Bench, by a majority of eight to one
- C. A five-judge Bench, by a majority of four to one
- D. A nine-judge Bench, by a majority of seven to two
Q4. Which one of the following earlier decisions was overruled by the majority in Mineral Area Development Authority v. Steel Authority of India (2024)?
- A. India Cement Ltd. v. State of Tamil Nadu (1989), a decision rendered by a seven-judge Bench
- B. State of West Bengal v. Kesoram Industries Ltd. (2004), a decision rendered by a five-judge Bench
- C. Hingir-Rampur Coal Co. Ltd. v. State of Orissa (1961), a decision on the Orissa cess legislation
- D. State of Orissa v. M.A. Tulloch & Co. (1964), a decision on the effect of a Union declaration
Q5. Consider the following pairs of entries in the Seventh Schedule of the Constitution and their subject matter:
1. Entry 54, Union List — regulation of mines and mineral development to the extent to which such regulation under the control of the Union is declared by Parliament by law to be expedient in the public interest
2. Entry 23, State List — regulation of mines and mineral development, subject to the provisions of the Union List entry relating to such regulation
3. Entry 50, State List — taxes on lands and buildings
4. Entry 49, State List — taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development
Which of the above is/are correctly identified?
- Entry 54, Union List — regulation of mines and mineral development to the extent to which such regulation under the control of the Union is declared by Parliament by law to be expedient in the public interest
- Entry 23, State List — regulation of mines and mineral development, subject to the provisions of the Union List entry relating to such regulation
- Entry 50, State List — taxes on lands and buildings
- Entry 49, State List — taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development
- A. 1 and 2
- B. 2 and 3
- C. 1 and 4
- D. 3 and 4
Q6. Periodical inspection of leasehold areas to monitor conservation of minerals, systematic and scientific mining and protection of the environment, under the Mineral Conservation and Development Rules, 2017 — for minerals other than coal, atomic minerals and minor minerals — is carried out by which one of the following?
- A. The Geological Survey of India, an attached office engaged in national geoscientific data creation
- B. The Directorate General of Mines Safety, which enforces occupational safety statutes in mines
- C. Mineral Exploration and Consultancy Limited, a public sector exploration and drilling agency
- D. The Indian Bureau of Mines, a subordinate office functioning as the national technical regulator
Q7. Consider the following pairs of amendments to the Mines and Minerals (Development and Regulation) Act, 1957 and the reform each introduced:
1. Amendment of 2015 — establishment of the District Mineral Foundation and of a trust to fund mineral exploration
2. Amendment of 2023 — introduction of the exploration licence for deep-seated and critical minerals listed in a newly added Schedule
3. Amendment of 2025 — renaming of the exploration trust as the National Mineral Exploration and Development Trust and raising the contribution to it from two to three per cent of royalty
4. Amendment of 2021 — making auction the mandatory method for the grant of mineral concessions for the first time
Which of the above is/are NOT correctly matched?
- Amendment of 2015 — establishment of the District Mineral Foundation and of a trust to fund mineral exploration
- Amendment of 2023 — introduction of the exploration licence for deep-seated and critical minerals listed in a newly added Schedule
- Amendment of 2025 — renaming of the exploration trust as the National Mineral Exploration and Development Trust and raising the contribution to it from two to three per cent of royalty
- Amendment of 2021 — making auction the mandatory method for the grant of mineral concessions for the first time
- A. 1 only
- B. 4 only
- C. 2 and 3
- D. 1 and 4
Q8. The creation and updating of national geoscientific information and country-wide mineral resource assessment, through ground, airborne and marine surveys, is the primary mandate of which one of the following?
- A. The Indian Bureau of Mines, which oversees conservation and scientific mining in leasehold areas
- B. Mineral Exploration and Consultancy Limited, which undertakes contracted drilling and exploration work
- C. The Geological Survey of India, which also undertakes glaciological and seismotectonic studies
- D. Khanij Bidesh India Limited, which pursues mineral asset acquisition and exploration overseas
Q9. The District Mineral Foundation, to be established in districts affected by mining-related operations, owes its statutory basis to which one of the following?
- A. Section 9B of the MMDR Act, 1957, inserted by the amendment of 2015
- B. Section 9C of the MMDR Act, 1957, inserted by the amendment of 2015
- C. Section 9D of the MMDR Act, 1957, inserted by the amendment of 2026
- D. Section 11A of the MMDR Act, 1957, inserted by the amendment of 2021
Q10. Consider the following statements regarding the report of the Sixteenth Finance Commission for the period 2026-31:
1. The share of States in the divisible pool of central taxes has been recommended at 41 per cent, the same level as recommended by the Fifteenth Finance Commission.
2. Income distance, measured with reference to per capita Gross State Domestic Product, carries the highest weight among the criteria for horizontal devolution, at 42.5 per cent.
3. Cesses and surcharges levied by the Union form part of the divisible pool out of which the States' share is computed.
4. 'Contribution to Gross Domestic Product' figures as a criterion for horizontal devolution with a weight of 10 per cent, the same weight as that assigned to Area and to Forest.
Which of the above is/are correctly identified?
- The share of States in the divisible pool of central taxes has been recommended at 41 per cent, the same level as recommended by the Fifteenth Finance Commission.
- Income distance, measured with reference to per capita Gross State Domestic Product, carries the highest weight among the criteria for horizontal devolution, at 42.5 per cent.
- Cesses and surcharges levied by the Union form part of the divisible pool out of which the States' share is computed.
- 'Contribution to Gross Domestic Product' figures as a criterion for horizontal devolution with a weight of 10 per cent, the same weight as that assigned to Area and to Forest.
- A. 1 and 2 only
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1 and 3 only
Q11. Consider the following statements comparing India's major mineral-producing States:
1. In value terms, Jharkhand accounts for a larger share of the country's coal output than Chhattisgarh does.
2. Odisha leads the country in iron ore output, but its mineral basket is confined exclusively to iron ore, coal and limestone, with neither bauxite nor chromite being raised in the State.
3. Chhattisgarh and Madhya Pradesh both figure among the five largest contributors to the value of coal output, whereas Maharashtra does not figure among them at all.
Which of the statements given above is/are correct?
- In value terms, Jharkhand accounts for a larger share of the country's coal output than Chhattisgarh does.
- Odisha leads the country in iron ore output, but its mineral basket is confined exclusively to iron ore, coal and limestone, with neither bauxite nor chromite being raised in the State.
- Chhattisgarh and Madhya Pradesh both figure among the five largest contributors to the value of coal output, whereas Maharashtra does not figure among them at all.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q12. Under the centralised concession framework that underpins the National Critical Mineral Mission, of the 30 minerals notified as critical and strategic, how many are reserved for auction by the Central Government?
- A. 12 of the 30, the rest being auctioned by the State Governments concerned
- B. 18 of the 30, the rest being auctioned by the State Governments concerned
- C. 24 of the 30, the rest being auctioned by the State Governments concerned
- D. All 30, no critical mineral being left to State Governments for auction