New Delhi/Bhubaneswar: The Lok Sabha has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 without debate amid Opposition protests, sparking significant concern in mineral-rich states like Odisha over potential revenue losses exceeding ₹1 lakh crore.
Introduced by Coal and Mines Minister G. Kishan Reddy, the Bill inserts a new Section 9D into the Mines and Minerals (Development and Regulation) Act, 1957, restricting state governments from imposing additional taxes, cesses or other levies on mineral rights and mineral-bearing lands unless strictly permitted under conditions framed by the central government. It specifies that any such tax or levy not deposited or recovered by a state before the amendment comes into force will be deemed invalid, though amounts already collected will not be liable for a refund.
The legislation also expands the Union’s regulatory control to cover mineral-bearing lands containing mineral contents as defined by parameters set by the Centre, in addition to its existing oversight of mines and mineral development.
The government argued that inconsistent and steep levies imposed by individual states create fiscal unpredictability, raise production costs, and force industries toward expensive mineral imports despite domestic availability. The central government maintained that taking regulatory control over mineral-bearing lands and streamlining levies is necessary to ensure uniform market conditions, protect domestic supply chains, and foster long-term industrial growth.
This statutory prohibition directly counters a landmark July 2024 verdict by a nine-judge Constitution Bench of the Supreme Court, which established that royalty is not a tax and affirmed the constitutional authority of states to tax mineral rights and mineral-bearing lands. In a subsequent clarification in August 2024, the apex court allowed states to retrospectively collect tax dues dating back to April 1, 2005, spread across 12 annual instalments starting April 1, 2026, while waiving pre-July 2024 interest and penalties.
For Odisha, that judicial green light promised a massive financial recovery of over ₹1 lakh crore out of an estimated ₹1.5 lakh crore total nationwide, primarily by reviving the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act, 2004, alongside an expected annual revenue boost of around ₹12,000 crore. The ORISED Act, originally passed by the then Biju Janata Dal (BJD) government to impose a levy of up to 20 per cent on the annual value of mineral-bearing lands, had been struck down by the Orissa High Court before being upheld on appeal by the Supreme Court.
The passage of the new central legislation has triggered sharp reactions from the BJD. Former minister Ranendra Pratap Swain alleged that the Bill seeks to overturn the landmark Supreme Court verdict and primarily benefits large mining companies, describing it as contrary to the interests of states like Odisha. He questioned whether the BJP-led state government would remain silent and criticised the 20 BJP MPs from Odisha for not speaking out during the Bill’s passage in the Lower House.
Policy analysts and legal experts also observed that by curtailing states’ sovereign taxation powers, the legislation has reopened a major debate on fiscal federalism that may face fresh legal challenges in the courts.
