Centre–States Tussle over the Mines and Minerals Bill, 2026

Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, reviving the Centre–State dispute over taxation of mineral resources.

Mineral-rich States such as Jharkhand and Kerala have opposed the amendments, citing potential revenue losses and concerns over fiscal federalism.

Key Provisions of the Bill

• The Bill seeks to limit additional cesses and levies imposed by States on mineral rights and mineral-bearing land.
• It also proposes to extinguish certain unpaid or unrecovered dues arising from such State levies imposed before the new law comes into force.
• Outstanding dues affected by the measure are estimated at around ₹2 lakh crore across the mining sector.

Fiscal Certainty for Industry

• The Centre argues that unchecked State-level levies can increase mineral costs, infrastructure costs and inflationary pressures.
• The amendments aim to prevent multiple or excessive State levies and provide greater certainty over the mining industry’s fiscal burden.
• Mining companies already bear royalty, District Mineral Foundation (DMF) and National Mineral Exploration and Development Trust (NMEDT) contributions along with various State cesses.
• The Centre is considering a reasonable overall ceiling on mineral-sector levies after consultations with States.

Supreme Court Background

• In July 2024, the Supreme Court upheld the power of States to tax mineral rights and overturned the earlier India Cement Ltd. v. State of Tamil Nadu (1989) position.
• The ruling encouraged mineral-rich States to explore additional taxes and cesses on mineral-bearing land and mineral rights.

States’ Revenue Loss

• Jharkhand argues that mining receipts are crucial to its finances, accounting for about 84.9% of its own non-tax revenue in 2024–25.
• Jharkhand estimates that its Mineral Bearing Land Cess could generate around ₹11,000 crore annually.
• States fear that restrictions on mineral levies could substantially reduce their prospective revenues and fiscal autonomy.

Implications for Federalism

• States argue that limiting their constitutionally recognised taxation powers could weaken fiscal federalism and State autonomy.
• The Centre maintains that national economic interests require safeguards against excessive levies on strategically important minerals.
• A balanced framework requires transparent limits and adequate consultation with mineral-producing States.