Parliament passes the Mines and Minerals (Development and Regulation) Amendment Bill, 2026

Polity & Governance / Economic Development · 24 August 2026 · Based on The Hindu (original report)

2-minute summary

The Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, centralizing the extraction, management, and regulation of mineral-bearing lands under the Central government. The amendment explicitly prohibits state governments from imposing any tax, cess, or other levies on mineral rights or mineral-bearing lands, sparking intense debate over cooperative federalism. Odisha, which contributes the largest share (43.49%) of India's non-fuel, non-atomic mineral production value, fears a massive hit to its fiscal health and autonomy. On the ground, local communities in mining hubs like the Sukinda Valley (holding 98% of India's chromite) continue to suffer from severe environmental degradation, such as carcinogenic hexavalent chromium contamination. While the Centre maintains that the amendment preserves existing state mineral taxes and minor mineral rights, critics argue it blurs accountability for local rehabilitation, environmental protection, and tribal welfare, thereby disrupting the delicate Centre-State constitutional balance.

Why it's in the news

The passage of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, has triggered intense political and constitutional debate, with mineral-rich states like Odisha protesting against the centralization of mineral rights and the prohibition of state-level mining cesses.

Background and context

The Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, is the cornerstone of mineral governance in India. Historically, the sector has operated under a dual regulatory framework where the Centre regulates major minerals (under Entry 54 of the Union List) and states manage minor minerals and collect royalties. Over the years, mineral-rich states like Odisha, Chhattisgarh, and Jharkhand have heavily relied on mining-related cesses to bolster their fiscal revenues and fund local development. However, the mining sector has faced persistent challenges, including non-uniform taxation across states, regulatory bottlenecks, and severe environmental degradation. The 2026 Amendment seeks to establish uniform national control over mineral-bearing lands to streamline extraction and meet long-term national goals, but it curtails the states' power to levy additional taxes or cesses, leading to a constitutional and fiscal standoff between the Centre and mineral-rich states.

Constitutional provisions

• Seventh Schedule, List I (Union List), Entry 54 — Grants the Union the power to regulate mines and mineral development to the extent declared by Parliament by law to be expedient in the public interest.
• Seventh Schedule, List II (State List), Entry 23 — Grants states the power to regulate mines and mineral development, subject to the provisions of List I with respect to regulation and development under the control of the Union.
• Article 246 — Delineates the legislative competence of Parliament and State Legislatures regarding the subjects listed in the Seventh Schedule.

Committees and reports

• Hoda Committee on National Mineral Policy — Recommended reforms to stimulate investment, streamline regulatory procedures, and establish stable tax regimes in the mining sector.
• Sarkaria Commission Report — Emphasized cooperative federalism and recommended systematic consultation with states before the Union exercises overriding powers on concurrent or shared resource subjects.

Government schemes

• Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) — Implemented through District Mineral Foundations (DMF) to channel mining revenues into the welfare of populations and areas affected by mining operations.

Previous UPSC questions on this theme

• Prelims GS-1 2025 — Consider the following statements : Statement I : In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories. Statement II : In India, the Central Government has the power to notify minor minerals under the relevant law. Which one of the following is correct in respect of the above statements? (a) Both Statement I and Statement II are correct and Statement II explains Statement I (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I (c) Statement I is correct but Statement II is not correct (d) Statement I is not correct but Statement II is correct
• Prelims GS-1 2019 — With reference to the management of minor minerals in India, consider the following statements : 1. Sand is a 'minor mineral' according to the prevailing law in the country. 2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government. 3. State Governments have the power to frame rules to prevent illegal mining of minor minerals. Which of the statements given above is/are correct? (a) 1 and 3 only (b) 2 and 3 only (c) 3 only (d) 1, 2 and 3

Mains practice: The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, shifts the balance of power over mineral resources towards the Centre. Critically analyze its implications on fiscal federalism and the welfare of mining-affected communities.

The MMDR Amendment Bill, 2026, marks a significant shift in India's resource governance by centralizing the regulation of mineral-bearing lands and prohibiting states from levying any tax or cess on mineral rights. While aimed at streamlining mineral extraction for national goals, it raises deep federal and socio-economic concerns.

• **Erosion of Fiscal Federalism**: By barring states from imposing taxes or cesses on mineral-bearing lands, the Bill curtails the financial autonomy of mineral-rich states like Odisha (which accounts for 43.49% of mineral production value). This impacts their independent revenue-generation capacity.

• **Constitutional Overlap**: Under Entry 23 of the State List, states regulate mines subject to Union laws (Entry 54 of Union List). The absolute centralization of mineral-bearing lands risks reducing states to mere administrative agents, undermining cooperative federalism.

• **Impact on Local Communities**: Mining belts, particularly tribal areas like Sukinda Valley, face severe environmental degradation (e.g., carcinogenic hexavalent chromium pollution). Local governments bear the immediate accountability for health, rehabilitation, and ecological restoration. Centralization may blur this accountability, delaying grievance redressal.

• **Welfare and Development**: Reduced state revenues could constrain state-level welfare spending and local development projects in ecologically sensitive mining zones, despite the existence of District Mineral Foundations (DMF).

To balance national strategic interests with state autonomy, the Centre must engage in constructive dialogue with mineral-rich states. True cooperative federalism requires ensuring that local communities do not bear the environmental costs of mining while being deprived of its fiscal benefits.

Prelims practice questions

Q1. With reference to the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, consider the following statements: 1. It completely transfers the regulation of minor minerals from State governments to the Central government. 2. It prohibits State governments from imposing any tax, cess, or levy on mineral rights or mineral-bearing lands. Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer: B. Statement 1 is incorrect because the amendment does not impact minor minerals, which remain under state control. Statement 2 is correct as the Bill explicitly provides that no tax, cess, or other levy shall be imposed by the State government on mineral rights or mineral-bearing lands.

Q2. According to the Ministry of Mines' 2024-25 data cited in the context of the MMDR Amendment, which of the following States accounts for the largest share of India's mineral production value (excluding atomic, fuel, and minor minerals)?

1. Odisha
2. Chhattisgarh
3. Rajasthan
4. Karnataka

Answer: A. Odisha accounts for the largest share of India's mineral production value at 43.49%, followed by Rajasthan (16.26%) and Chhattisgarh (13.69%).

Q3. Sukinda Valley in Odisha, frequently in the news for environmental pollution caused by mining activities, is India's primary source of which of the following minerals?

1. Iron Ore
2. Coal
3. Chromite
4. Bauxite

Answer: C. Sukinda Valley contains 98% of India's chromite resources and is highly affected by hexavalent chromium pollution due to extensive chromite mining.

Revision flashcards

• Which state has the highest share in India's mineral production value (excluding atomic, fuel, and minor minerals) as of 2024-25? Odisha, accounting for 43.49% of the total value.
• Under which constitutional schedule and entries are mines and mineral development regulated in India? Seventh Schedule: Entry 54 of the Union List (List I) and Entry 23 of the State List (List II).
• What major fiscal restriction does the MMDR Amendment Bill, 2026, place on State governments? It prohibits State governments from imposing any tax, cess, or other levy on mineral rights or mineral-bearing lands.
• Which toxic and carcinogenic pollutant is associated with chromite mining in Odisha's Sukinda Valley? Hexavalent chromium.
• What is the primary objective of the District Mineral Foundation (DMF) established under the MMDR Act? To work for the interest and benefit of persons and areas affected by mining-related operations.