08:20
The Mines and Minerals (Development and Regulation) Amendment Bill, passed by Parliament, is applicable only to major minerals and will not affect states' existing powers over minor minerals, Union Mines Minister G Kishan Reddy said on Thursday in a bid to calm states' concerns.
Reddy said the Centre was not seeking to take away the rights of states through the Bill, but wanted to ensure that differences in levies did not create distortions in the cost of major minerals across the country.
Major minerals include vital metallic and fuel ores like coal and iron ore. Minor minerals include building and construction materials like sand, gravel, and ordinary clay.
The Bill has irked non-BJP-ruled states, with Kerala warning it could take legal action against the legislation once it becomes an Act and Jharkhand Chief Minister Hemant Soren warning of a 'massive agitation'.
'Lok Sabha passed it, we expressed our strong opposition as a state. We will express our protest now also. We will be able to take legal actions only when it gets passed, and becomes an Act,' Kerala Chief Minister V D Satheesan said.
'Our main concern is that this is an encroachment to the State List. The state has right on land, and this is an encroachment to the State List. This is against the rights given to the state by our Constitution,' he said at a press conference.
'Mines and Minerals (Development and Regulation) Amendment Bill, 2026, is a black bill -- injustice to Jharkhand, its people. It is a severe blow to their development and future,' Soren said on X.
Meanwhile, a senior official in the Karnataka government said the state was examining the Bill and considering implications for fiscal federalism.
"We are currently studying the Bill, and will take a call in due course," the official said.
The Bill, passed by the Lok Sabha on Monday and Rajya Sabha on Thursday, now awaits Presidential assent for it to become law.
The issue has assumed significance following the Supreme Court's 2024 judgment in Mineral Area Development Authority versus Steel Authority of India, in which a nine-judge Constitution Bench held that states have the power to tax mineral rights under Entry 50 of the State List.
Clarifying the scope of the proposed changes, Reddy said the Bill would have no impact on the 49 minor minerals, for which states would continue to retain their existing powers relating to exploration, mining, auctions, mineral rights and taxation. The proposed framework is instead focused on major minerals, he said.
The Bill seeks to restrict state governments from imposing taxes, cess and other levies on mineral rights and mineral-bearing lands except in accordance with conditions or restrictions prescribed by the Centre.
According to Reddy, differences in the fiscal burden on major minerals across states can ultimately affect the cost of raw materials for industries and consumers. He cited coal as an example, saying higher costs could make domestic coal less competitive against imports and could feed into electricity costs.
Reddy cited data on mineral revenue to argue that states' share from the sector has increased over the years.
According to data shared by the minister, states' share in total mineral revenue stood at 65 per cent, or Rs 13,258 crore, in 2014-15, and increased to 88 per cent, or Rs 71,035 crore, in 2024-25.
The Centre's share, meanwhile, declined from 35 percent to 12 per cent.
In coal, the minister said states' revenue increased from Rs 11,948 crore in 2014-15 to Rs 58,592 crore in 2024-25, with their share rising from 55 per cent to 96 per cent.
Reddy added that 100 per cent of the auction premium and royalty goes to states, while funds collected under the District Mineral Foundation are used for local area development.
However, these figures relate to the distribution of mineral and coal revenue between the Centre and states and do not quantify the potential revenue loss to states from the proposed restrictions on their taxing powers.
-- Saket Kumar, Business Standard
