The amendment to the Mines and Minerals Bill 1957, affecting the taxation by states on mineral products, now only needs the assent of the President to become a law. The bill was cleared by the Rajya Sabha today, a day after it was passed in the Lok Sabha, in a sitting that saw the bill cleared in under 10 minutes amid opposition disruption.
Welcoming the passage, Union Minister G Kishan Reddy, said that these reforms will bring greater certainty and predictability to the mining sector, catalyse investment, expand domestic mineral production and strengthen India’s mineral security.
But why does it matter? To understand that, one has to go back to 2024, when a Supreme Court ruling opened the door for states to tax mining companies more freely, and states like Odisha and Jharkhand walked through it fast.
The Centre’s move to shut that door — partially — with a new amendment has finally come to fruition. The 2026 amendment mandates that states can’t tax minerals on their own terms anymore.
What happened
Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, this week — Lok Sabha on Wednesday, Rajya Sabha on Thursday. It now heads to the President for assent, after which it becomes law, amending the original Mines and Minerals (Development and Regulation) Act, 1957.
What actually changed
Two big shifts. States can no longer set their own taxes, cess or levies on mineral rights or mineral-bearing land — any such charge now needs the Centre’s sign-off on conditions it prescribes. And “mineral-bearing land” itself comes under central regulatory control for the first time, on top of the Centre’s existing say over how mines are run.
There’s a retrospective sting built in too: any tax demand a state had raised but hadn’t yet collected before this amendment kicks in is now void. Money already collected stays put — no refunds either way.
Who does it affect states
Mostly the mineral-rich ones — Odisha, Jharkhand, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana. According to official document, Odisha gets a cess close to 12% of the average sale price, and Jharkhand receives around ₹450 a tonne for coal and ₹600 a tonne for iron ore — though Jharkhand’s own Mineral-Bearing Land Cess Act, 2024, sets statutory rates lower, at ₹100 a tonne for coal and iron ore, ₹70 for bauxite and ₹50 for limestone and manganese, suggesting the higher industry figure may bundle in other levies alongside cess.
Nationally, arrears these states were chasing after the 2024 Supreme Court verdict added up to an estimated ₹1.5 lakh crore — money that would now be off the table.
G Kishan Reddy, Union Minister For Coal and Mines, pushed back on the “states lose out” framing in his Rajya Sabha reply, pointing out states’ share of overall mineral revenue has climbed from 65% in 2014-15 to 85% now, with the Centre keeping just 11%. His argument: this amendment only stops states from stacking extra, unpredictable levies on top of what they already get.
Who does it affect consumers
Coal, iron ore and limestone feed India’s power plants, steel mills and cement units — coal alone accounts for 73% of the country’s electricity generation, per Reddy. The government’s bet is that capping runaway state cesses keeps mining costs, and eventually electricity, steel and cement prices, more stable for end consumers.
The flip side: cess and royalty money doesn’t just vanish into a state treasury — a chunk would have been gone into the District Mineral Foundation, which provides funding to roads, schools and health centres in mining-hit districts, often tribal belts, according to MMDR Amendment Act of 2015.
If states collect less going forward, it’s these communities, not urban consumers, that are likely to feel it first.
Why the Opposition protested
The parliament witnessed a noisy debate, with DMK’s Tiruchi Siva moved to send it to a Rajya Sabha select committee for closer scrutiny — the substantive objection being that land and land-tax are constitutionally state subjects, and the Supreme Court’s 2024 ruling had specifically said Parliament can restrict states’ power to tax mineral rights, but not their power to tax mineral-bearing land itself.
The Opposition has criticised the amendment as unconstitutional and a violation of the Supreme Court’s 2024 verdict, and as an encroachment on states’ federal rights to mineral revenue.
Aam Aadmi Party (AAP) MP from Rajya Sabha, Sanjay Singh in the parliament debate, said, “This bill has been brought directly to give coal blocks… to give minerals to a few capitalists of the country, and states like Odisha, Telangana, Bengal, Tamil Nadu—all those states where mining exists—you want to directly capture the mining over there…”