"New Mining Law Curbs States' Mineral Taxation Powers"
MMDR Act, 1957
the primary law governing mining regulation and mineral development in India.
Entry 54 (Union List)
grants Parliament power to regulate mines and minerals in the public interest.
The constitutional relationship between the Centre and states over mining rests on three entries in the Seventh Schedule. Entry 54 of the Union List lets Parliament regulate mines and mineral development when it declares this expedient in the public interest. Entry 23 of the State List gives states residual power over mines, but this is expressly subject to Entry 54. Separately, Entry 50 of the State List allows states to tax mineral rights, but only subject to any limitations Parliament imposes by a law on mineral development. This three-way arrangement has produced recurring friction, and it is exactly what the 2026 mining law reopens.
The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) operationalises this framework. It separates "major minerals," closely regulated by the Centre through royalty rates fixed in its Second Schedule, from "minor minerals," where states frame their own concession rules under Section 15. Even here, the Union keeps the final word: only the Central Government can notify which minerals count as "minor" in the first place. This pattern, states holding operational power while the Centre retains a controlling authority, runs through the mining framework and explains why even a state's taxation power over mineral rights can be curtailed by a parliamentary law.
The current dispute traces to a 2024 constitutional ruling. In Mineral Area Development Authority v Steel Authority of India Ltd, a nine-judge bench held, by an 8:1 majority, that royalty on minerals is not a tax, and that states retain legislative competence under Entry 50 to tax mineral rights and mineral-bearing land. This overruled the 1989 India Cement Ltd v State of Tamil Nadu ruling, which had treated royalty as a tax exclusively occupied by the Centre. The 2024 ruling also waived interest and penalties on past dues and allowed staggered payment over twelve years.
The 2026 amendment answers the 2024 ruling by using Parliament's own power under Entry 54 to cap the state powers the Court had just affirmed. It restricts states from imposing specified levies on mineral rights and mineral-bearing land, and moves towards a uniform, nationally capped ceiling covering all such levies, out of roughly 14 distinct levies currently applicable in the sector. The law also extinguishes unpaid or unrecovered dues arising from such levies imposed before it takes effect, wiping out demands that mining companies had contested for years.
The government's justification is economic. …
Consider the following statements:
Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.
Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.
Which one of the following is correct in respect of the above statements?
Consider the following statements :
1.In India, State Governments do not have the power to auction non-coal mines.
2.Andhra Pradesh and Jharkhand do not have gold mines.
3.Rajasthan has iron ore mines.
Which of the statements given above is/are correct?
Consider the following statements:
I.India has joined the Minerals Security Partnership as a member.
II.India is a resource-rich country in all the 30 critical minerals that it has identified.
III.The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.
Which of the statements given above are correct?
Which of the following statements about the classification of minerals under the Mines and Minerals (Development and Regulation) Act, 1957 is/are correct?
1.State Governments have the power to make rules for granting concessions for minor minerals.
2.The Central Government has the power to notify which minerals are classified as 'minor minerals'.
Select the correct answer using the code given below.
With reference to the recent history of mineral taxation in India, consider the following statements:
1.The 1989 ruling in India Cement Ltd v State of Tamil Nadu held that royalty on minerals is a tax and that states lack legislative competence to tax mineral rights.
2.A 2024 Supreme Court ruling overruled this judgment and upheld states' power to tax mineral rights and mineral-bearing land.
Which of the statements given above is/are correct?
Consider the following statements regarding constitutional provisions on mineral taxation in India:
1.Entry 50 of the State List allows states to tax mineral rights, subject to limitations that Parliament may impose by law relating to mineral development.
2.Entry 54 of the Union List empowers Parliament to regulate mines and mineral development to the extent it declares such regulation expedient in the public interest.
Which of the statements given above is/are correct?
Consider the following statements about the Mines and Minerals (Development and Regulation) Amendment Act, 2026:
1.It restricts states from imposing specified levies on mineral rights and mineral-bearing land.
2.It extinguishes unpaid or unrecovered dues arising from such levies imposed before the Act came into force.
Which of the statements given above is/are correct?
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