Parliament Passes Bill for Stable Mining Sector
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, passed by both Houses of Parliament on August 13, 2026, aims to bring long-term stability and investment to India’s major minerals sector. The updated legislation amends the Mines and Minerals (Development and Regulation) Act of 1957, ensuring that state rights over land and mineral resources remain intact.
Key highlights of the amendment include the continuation of the current arrangement, where approximately 90% of the taxes and statutory payments from mining will still go to state governments. The amendment will not alter the states’ authority to regulate or impose taxes on minor minerals, thereby preserving their financial interests in this sector.
Boosting Investment and Atmanirbhar Bharat
With this legislative move, the government aims to enhance certainty and predictability in the fiscal environment of the mining industry. This development is expected to encourage higher investments, aligning with the broader goals of the Atmanirbhar Bharat initiative while contributing to the vision of Viksit Bharat 2047.
Mineral Imports and Economic Impact
Minerals are crucial for infrastructure development, energy security, and the broader manufacturing sector. In the fiscal year 2025-26 alone, India imported minerals worth over ₹10.1 lakh crores. The government emphasizes that excessive taxation at the state level might compel the industry to depend more on imports, placing a significant financial strain on the national economy.
Currently, states apply around 14 different taxes and charges on mining operations, including royalties, auction premiums, and Goods and Service Tax (GST). From FY 2015-16 to FY 2025-26, over ₹5 lakh crores have been collected by major mining states, contrasted with only ₹82,000 crores received at the central level during the same period. This trend is set to remain unchanged following the Bill’s passage.
Revenue from Auctions and Future Strategies
The introduction of the auction regime in 2015 has significantly boosted state revenues through auction premiums. From 2020-21 to 2025-26, major mining states collected more than ₹96,000 crores from this source, supplementing existing revenue from royalties and other fees. States leading in the auction process have experienced substantial revenue increases.
As mineral resources are finite and primarily located in specific regions, their management necessitates a unified national strategy to promote sustainable and uniform economic growth. Current disparities in state-level taxation could disrupt this balance by increasing domestic costs and creating competition for foreign imports, even when abundant domestic resources exist.
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