Centre assures States: New mining law preserves their rights
Union Minister for Coal and Mines G. Kishan Reddy on Thursday defended the newly passed Mines and Minerals (Development and Regulation) Amendment Bill, 2026, asserting that it does not encroach upon the rights of States over their mineral resources. The Bill, passed by Parliament this week, has been a point of contention among some State governments.
Addressing reporters, Mr. Reddy said the amendment pertains only to major minerals, leaving minor minerals entirely under State jurisdiction. "We are neither seeking to impinge upon any State's rights nor acquire any control over States' resources," he said. "The government's primary objective is to ensure identical tax rates across the board to ensure effective prices do not spike."
The Minister clarified that the legislation does not alter revenue dynamics for minor minerals—covering exploration, production, land acquisition, block auctioning, and the levying of State taxes and cess. This, he added, ensures States continue to benefit from their resources as per existing arrangements.
According to a government memorandum, major minerals include coal, lignite, iron ore, graphite, cobalt, lithium and nickel. The provisions of the new law apply to a specified set of States, including Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and Goa, among others.
The Minister said the government's primary objective is to ensure uniform tax rates across the country to prevent a spike in effective prices. He also spoke about the proposed coal and minerals exchange, stating that differing rates would hamper the market for entities with higher prices. "Similar prices become important," he added.
Officials indicated that India is expected to have its first coal exchange within the next eight to nine months. The move is part of broader reforms to spur production of major minerals.
On revenue sharing, Mr. Reddy noted that States' share in overall mineral revenues has grown from 65% to 88% between fiscal years 2014-15 and 2024-25. He credited the Union government for ensuring a steady flow of revenue to States.
The Rajya Sabha passed the Amendment Bill on Wednesday, August 12. The legislation, among other things, bars States from levying any tax or cess on mineral-bearing lands and related operations. It has drawn opposition from States like Kerala, which argue that it overrides the federal structure and encroaches on their constitutional powers.
The Bill now stands passed by Parliament, with the government maintaining that it will foster growth and equitability in the mining ecosystem while respecting the federal balance.
