New mining bill curbs states’ levy powers

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was introduced in the Lok Sabha on August 11, 2026 during the Monsoon Session. The move brought proposed changes to the legal framework governing mining and mineral rights before Parliament. Parliamentary reports noted that the introduction took place amid protests and disruptions in the House, reflecting immediate political contention around the measure.

Some reports stated that the bill was introduced by Union Minister of Coal and Mines G. Kishan Reddy. The introduction marked the formal start of the legislative process for the amendments, which must still pass scrutiny and voting in both Houses before they can come into force.

At the core of the bill is the insertion of a new Section 9D into the existing MMDR Act. This provision would restrict state governments from imposing any tax, cess or other levy on mineral rights or on mineral-bearing land where the charge is based on mineral quantity, mineral value, royalty payable or similar parameters. States would be able to impose such levies only in accordance with conditions or restrictions prescribed by the central government.

The draft language is designed to cover levies linked to key economic metrics of mineral extraction, such as output or royalty amounts. By placing these categories of charges under central conditions, the proposal seeks to create a more uniform regime for fiscal impositions on mineral rights across different states.

The bill also addresses how existing state taxes, cesses and levies on mineral rights or mineral-bearing land would be treated once the amendment is in force. It proposes that any such state impost that has not been collected, deposited or recovered before the effective date of the amendment would be treated as invalid. This would affect levies that are on the statute books or subject to demand but remain unrealised by the time the law takes effect.

At the same time, the bill specifies that amounts already collected or received by state governments under these levies would not be refundable. This clause provides certainty regarding past collections, while drawing a clear line for future enforceability of state-level mineral charges once the amendment becomes operational.

Opposition MPs and some experts have criticised the bill’s provisions, warning that the restrictions on state mineral levies could undermine state fiscal powers and raise broader concerns about federal balance. They argue that the measure concentrates greater control over mineral-related revenues with the central government by limiting states’ discretion to design and collect their own cesses and taxes in this area.

Congress MP Sasikanth Senthil wrote to the Lok Sabha Speaker requesting that the bill be referred to the Parliamentary Standing Committee on Coal, Mines and Steel for detailed examination. Calls for committee scrutiny reflect demands for closer assessment of the bill’s fiscal, legal and federal implications before any final legislative decision is taken.