2 weeks ago

India's mining tax overhaul reignites Centre-state tussle over revenue

India's mining tax overhaul reignites Centre-state tussle over revenue
How a new mining Bill threatens to reignite Centre vs states tensions · indianexpress.com

India's central government has made a new law about mining taxes.

Mining means digging useful things out of the ground, like coal, iron and limestone.

The new law says states, which are parts of India, cannot make new mining taxes unless the central government agrees.

It can also cancel some old mining taxes that states had planned but had not collected yet.

States with lots of mines, like Odisha and Jharkhand, are upset because they say they will lose money and lose their own power to make rules.

Jharkhand's leader called the law a "black law" and said people may protest.

He said mining money pays for about 85% of the state's own income that is not from central taxes.

The central government says the law makes the same rules for everyone, keeps mining costs down and helps companies feel sure about investing.

Mining companies mostly like the new law, but worried states may challenge it in court.

Key facts

Law
Mines and Minerals (Development and Regulation) Amendment Bill, 2026
Status
Passed by both Houses of Parliament; awaiting presidential assent
Key restriction
States cannot impose new taxes, cesses or levies on mineral rights or mineral-bearing land without central permission
Retrospective provision
Extinguishes unpaid dues from pre-law levies; outstanding dues estimated at around Rs 2 lakh crore
States' mineral revenue share
About 85%, up from 65% in 2014-15 (per Mines Minister G Kishan Reddy)
Odisha exposure
More than Rs 1 lakh crore in disputed mining-related claims
Jharkhand mining revenue
About 84.9% of the state's own non-tax revenue in 2024-25 (per CM Hemant Soren)
2024 Supreme Court ruling
July 25, 2024 ruling upheld states' power to tax mineral rights; royalty is not a tax

Quotes

Senior Mines Ministry official

An unnamed senior official from India's Ministry of Mines

“"States’ share of mineral revenue has risen to about 85 per cent from 65 per cent in 2014–15, arguing that the new law does not reduce their overall earnings."”
firstpost.com
“All we are saying is all these levies together should not be beyond a certain percentage”
indianexpress.com

B K Bhatia

Mining industry expert and former Director General of the Federation of Indian Mineral Industries (FIMI)

“Apart from royalty, District Mineral Foundation and National Mineral Exploration and Development Trust contributions, mining companies currently pay various other cesses, including environmental and pollution cesses. But the mineral-bearing land tax was the biggest additional burden on the industry”
indianexpress.com

Sources

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