Mining amendment is unfair to States, Pg7

Key Highlights:

• The Mines and Minerals (Development and Regulation) Amendment Act (MMDR), 2026 introduces Section 9D.
• Section 9D restricts State Governments from imposing taxes or levies on mineral rights or mineral-bearing land without Central government conditions.
• The Centre aims to create a predictable tax environment and encourage long-term investment in the mining sector.
• States contend that the amendment curtails their fiscal autonomy and ability to generate revenue from natural resources.
• Mineral-rich states like Odisha and Chhattisgarh significantly rely on mining receipts for their state budgets.

Detailed Insights:

• The amendment impacts the ability of states to raise resources for their development, despite bearing the social and environmental costs of mining.
• The Constitution grants states the power to tax mineral rights under Entry 50 of the State List and land under Entry 49 of the State List.
• The Supreme Court in Mineral Area Development Authority vs. Steel Authority of India (2024) affirmed states' power to tax mineral rights and mineral-bearing land.
• Section 9D potentially undermines this judgment by extending central restrictions to taxes on mineral-bearing lands.
• This raises significant federalism concerns regarding the balance of power between the Union and States over taxation.
• The NITI Aayog has previously highlighted the strong revenue mobilization by mineral-rich states through mining receipts.

Key Concepts Involved:

• Mines and Minerals (Development and Regulation) Act (MMDR): The principal legislation governing mining and mineral development in India.
• Entry 50 of the State List: Grants states the power to tax mineral rights, subject to parliamentary limitations.
• Entry 49 of the State List: Grants states the exclusive power to tax lands and buildings.
• Federalism: A system of government where power is constitutionally divided between a central authority and constituent political units.