Mines and Minerals (Development and Regulation) Amendment Bill, 2026 – Provisions, Significance & Concerns – Explained Pointwise

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, recently passed by Parliament, seeks to reform India’s mineral governance by restricting unregulated State-level levies on mineral rights and mineral-bearing lands and creating a more predictable fiscal regime. However, its curbs on State levies raise concerns over fiscal federalism, State autonomy and revenue loss.

What are the key provisions of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026?

1. Restrictions on State Taxes and Cesses: States will not be able to impose taxes, cesses or levies on mineral rights or mineral-bearing lands freely. Such levies can be imposed only subject to conditions or restrictions prescribed by the Central Government.
2. Central regulation of mineral-bearing lands: The Bill expands the regulatory framework under the MMDR Act to explicitly cover mineral-bearing lands, strengthening the Centre’s role in mineral governance.
3. Expanded Rule-Making Powers: Section 13 is amended to empower the Central Government to frame rules specifying the precise conditions, limits, and parameters under which States may impose future mineral-related levies.
4. Retrospective treatment of unpaid State levies: Certain unpaid or unrecovered State levies relating to mineral rights/mineral-bearing lands from before the amendment are treated as invalid. However, amounts already collected are not to be refunded.
5. Uniformity and fiscal predictability: The Bill aims to reduce differences in mineral taxation among States and provide greater certainty about mining costs. The government argues that this will encourage investment, increase domestic mineral production and reduce import dependence.
6. Retention of Minor Mineral Powers: The regulatory and revenue authority of State Governments over minor minerals (such as sand, gravel, marble, and granite) remains intact and unaffected by these provisions.
7. Focus on mineral security: The reform is also linked to strengthening India’s domestic mineral supply, particularly for industries dependent on minerals needed for energy transition, technology and strategic sectors.

What is the significance of the MMDR Amendment Bill, 2026?

1. Unified National Market: Minerals are geographically concentrated in a few states (such as Odisha, Jharkhand, and Chhattisgarh) but are essential nationwide. A standardized fiscal ceiling prevents price distortions and high interstate logistics costs, fostering a single domestic mineral market.
2. Promotes investment in the mining sector: Restricting unpredictable state-level taxes, cesses and levies can make the cost of mining more predictable. This may encourage domestic and foreign investment in the mining sector.
3. Creates a more uniform taxation framework: Different state-level levies can increase the cost of minerals and create disparities across states. The amendment seeks to prevent such fragmentation and establish greater uniformity in mineral taxation.
4. Critical & Strategic Mineral Supply: India’s transition toward clean energy, advanced manufacturing, and defense depends on critical minerals (such as lithium, cobalt, nickel, and rare earths). Removing excessive state-level cess prevents domestic extraction from becoming commercially unviable compared to global imports.
5. Reduces import dependence: Higher domestic mineral production can reduce India’s dependence on imported raw materials and strengthen Atmanirbhar Bharat.
6. Improves ease of doing business: A predictable fiscal regime reduces uncertainty regarding the long-term economics of mining projects, potentially improving the ease of doing business.
7. Addresses the post-MADA judgment situation: The amendment follows the Supreme Court’s 2024 Mineral Area Development Authority (MADA) v. SAIL judgment, which recognised states’ power to tax mineral rights while holding that royalty is not a tax. Thus, the Bill represents an important development in the Centre-State relationship over natural resources.

What are the major concerns associated with the MMDR Amendment Bill, 2026?

1. Erosion of fiscal autonomy of States: The Bill restricts States from imposing taxes, cesses or levies on mineral rights and mineral-bearing lands except within parameters prescribed by the Centre. This could reduce the taxing powers and financial autonomy of States, particularly mineral-rich States.
2. Impact on State revenues: States such as Jharkhand and Odisha depend significantly on mineral-related revenues. These States bear many of the environmental, social and infrastructural costs of mining. Restricting their ability to impose additional levies could affect their resources for infrastructure, welfare and development of mining-affected regions.
3. Concerns over cooperative federalism: Mineral taxation involves the constitutional distribution of powers between the Union and States. Greater central control may create Centre-State tensions and weaken the spirit of cooperative federalism.
4. Retrospective invalidation of certain levies: The Bill seeks to invalidate certain unpaid or unrecovered past state levies. This raises concerns about retrospective legislative intervention and the treatment of liabilities that had arisen under the earlier legal framework.
5. Excessive centralisation: The Centre would have substantial authority to prescribe the conditions and restrictions governing State mineral levies. This could shift mineral governance from a shared federal framework towards greater central control.
6. Post-MADA judgment concerns: The Supreme Court’s 2024 Mineral Area Development Authority v. SAIL judgment recognised the States’ power to tax mineral rights. The Bill’s restrictions on this power therefore raise questions about the legislative response to a Constitution Bench judgment and the balance between judicial interpretation and legislative power.

What should be the way forward?

1. Mineral Taxation Council on the GST Model: Establish a joint Centre-State consultative forum or utilize the Inter-State Council (Article 263) to determine taxation bands, royalty revisions, and cess caps collaboratively, rather than relying on unilateral Central executive notifications under Section 13.
2. Ensure a fair revenue-sharing mechanism: If States lose some revenue-raising powers, there should be an appropriate mechanism to compensate or share the gains from increased mining activity. This is particularly important for mineral-rich States that bear the environmental and social costs of mining.
3. Maintain fiscal predictability without excessive centralisation: Uniformity in taxation is desirable, but the framework should avoid unnecessarily restricting legitimate State fiscal powers. Clearly defined and transparent criteria should govern any restrictions imposed by the Centre.
4. Strengthen District Mineral Foundation (DMF): A greater share of mining-related benefits should reach local communities affected by mining through effective utilisation of DMF funds. This can ensure that mining-led growth translates into local development.
5. Promote sustainable mining: Faster clearances and greater investment should not come at the cost of forests, biodiversity, water resources and livelihoods. Strong environmental monitoring, mine-closure plans and ecological restoration should accompany mining reforms.
6. Build consensus on federal concerns: Given the constitutional and federal dimensions of mineral taxation, wider consultation with States, industry and affected communities would improve the legitimacy and durability of the reform. The issue is especially significant after the Supreme Court’s 2024 MADA v. SAIL judgment recognising States’ power to tax mineral rights.

Conclusion: The MMDR Amendment Bill, 2026 seeks to balance mining-led economic growth and mineral security with a more predictable fiscal regime. However, its success will depend on maintaining a balance between national uniformity and the fiscal autonomy of resource-rich States.