Mines and Minerals (Development and Regulation) Amendment Bill, 2026

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Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, triggering renewed debate over the distribution of mineral revenues between the Centre and States.
The Bill restricts States from imposing specified levies on mineral rights and mineral-bearing land.
It also proposes to extinguish unpaid or unrecovered dues arising from such levies imposed before the Bill comes into force, estimated at around ₹2 lakh crore.

Around 14 different levies currently exist in the mineral sector. These will continue, but their cumulative burden will be capped at a percentage to be decided after consultation with States.
The move follows the Supreme Court's July 2024 judgment, which upheld the power of States to levy taxes on mineral rights and mineral-bearing land.
The 2024 judgment overruled the 1989 India Cement Ltd. v. State of Tamil Nadu ruling, which had treated royalty as a tax under the Union List.
The Court also waived interest and penalties on pre-judgment tax demands and permitted staggered payment of dues over 12 years from April 1, 2026.
Following the judgment, mineral-rich States began introducing or proposing additional levies:

Jharkhand: Mineral-Bearing Land (MBL) tax on iron ore, increased from ₹100 to ₹400 per tonne.
Tamil Nadu: MBL tax of ₹160 per tonne on limestone.
Karnataka: Proposed tax on non-auctioned iron ore mines.

The Centre argues that excessive State-level levies increase the cost of minerals and can raise infrastructure and overall production costs.
Mining companies already contribute through royalty, District Mineral Foundation (DMF), National Mineral Exploration Trust (NMET) and environmental and pollution-related levies.
Industry supports the amendment on the grounds of greater fiscal certainty and predictability.
Mineral-rich States, however, fear substantial revenue losses.
Jharkhand has highlighted that mining revenue constituted about 84.9% of its own non-tax revenue in 2024-25, while its MBL Cess was expected to generate around ₹11,000 crore annually.
Kerala has raised concerns regarding the implications for fiscal federalism.

States' own non-tax revenue was about ₹3.3 lakh crore in 2024-25, of which around 41% or ₹1.36 lakh crore came from mineral and petroleum receipts.
Mineral and petroleum receipts constitute about 3.4% of States' total revenue receipts nationally, but dependence is considerably higher in mineral-rich States:

The issue therefore represents a wider Centre–State fiscal federalism debate.
A balanced approach requires transparent limits on cumulative levies while ensuring that mineral-producing States are not deprived of legitimate revenue.
Genuine consultation with States can provide cost predictability to industry while protecting States' fiscal interests.