Bhubaneswar: Amid a raging controversy following the passage of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 in Parliament, divergent views have emerged from different quarters about its impact on Odisha’s revenue generation.
Opposition political parties and exerts are of the opinion that Odisha, one of India’s richest mineral-producing states, is likely to face a major revenue setback.
The legislation, passed on August 13, seeks to restrict states from independently imposing taxes, cesses or other levies on mineral rights and mineral-bearing land.
According to industry estimates, Odisha stands to lose around Rs 12,000 crore in annual mineral-related revenue and could be deprived of outstanding dues estimated at over Rs one lakh crore.
BJD president and Leader of Opposition in Odisha Assembly Naveen Patnaik has called upon the people to come together and oppose the Bill, stating that it will harm the interests of the state.
Claiming that Odisha’s economy was in danger as its tax resources will reduce to a great extent due to the amended Bill, Naveen said every year the state suffers losses of thousands of crores of rupees, which could have been used for a host of development work.
The former chief minister has lashed out at the Centre for passing such an important Bill without any discussion in the Parliament.
Stating that Odisha has the highest reserves of chromite, bauxite, iron ore, coal and manganese, the BJD chief said the Bill has snatched away rights of the state over all of these minerals.
However, the Odisha government has come out with clarifications claiming that there will be no impart on the state’s revenue following the passage of the bill. Rejecting opposition criticism of the new measure, the ruling BJP in Odisha has asserted that the changes would not cause any revenue loss to the state.
Ruling party leaders claimed that the MMDR amendments would create a stable and transparent regulatory framework and make India’s mining sector more competitive. The new reforms would accelerate exploration and production of critical and strategic minerals and ensure raw materials required by industries such as semiconductors are available at uniform prices across the country.
On the other hand, critics have raised questions over the stand adopted by the ruling party on the issue by recalling that the advocate general had supported collection of mineral tax arrears to protect state finances in 2024. They wonder as to why is state government is now saying that there will be no revenue impact.
Referring to a Supreme Court judgment of July 25, 2024, they point out that the apex court upheld the power of states to levy tax on mineral-bearing land under Entries 49 and 50 of List II of the Seventh Schedule. The Court rejected the plea to give only prospective effect to its earlier decision in Mineral Area Development Authority (MADA).
The SC had on August 14, 2024, directed that while states may levy or renew tax demands in terms of the MADA ruling, such demands shall not apply to transactions prior to April 1, 2005. Payment of the arrears has been staggered over 12 years beginning 1 April 2026. Interest and penalty on demands relating to the period before 25 July 2024 have been fully waived.
Recording the submissions of Odisha on the importance of protecting the financial interests of states, the apex court noted the arguments while dealing with the consequences of giving prospective effect to MADA and the need to safeguard state revenues.
The court observed that applying MADA only prospectively would create an unjust and discriminatory situation, particularly when states such as West Bengal (whose legislation was upheld in Kesoram Industries) and others had already been collecting the tax. It held that the doctrine of prospective overruling was not attracted in the present facts.
