THEBUSINESSBYTES BUREAU

NEW DELHI, AUGUST 13, 2026

In a move that could reshape the way India’s mineral economy is taxed and regulated, Parliament on Thursday cleared the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, paving the way for tighter central oversight of levies on mineral rights and mineral-bearing land.

The legislation, passed by the Lok Sabha on Wednesday and the Rajya Sabha on Thursday, seeks to limit the ability of state governments to impose taxes on mineral rights and mineral-bearing lands. It will take effect after receiving the President’s assent.

Responding to the debate in the Rajya Sabha, Union Mines Minister G Kishan Reddy defended the proposed changes, saying the amendment was aimed at bringing greater uniformity to mineral rates across the country and was not intended to dilute the constitutional powers or revenue interests of states.

Under the proposed framework, the Centre will regulate major minerals including coal, limestone, iron ore, copper and manganese, while states will retain regulatory powers over 49 minor minerals.

Reddy stressed the strategic importance of the mining sector to the broader economy, particularly coal, which he said accounts for 73% of India’s electricity generation. A stable and dependable power supply, he added, is critical to keeping Indian industry competitive.

The government also sought to allay concerns over the potential impact on state finances. Reddy said the share of mineral revenue flowing to states had risen sharply from 65 per cent in 2014-15 to 85 per cent currently. In the coal sector, the states’ share has increased from 51 per cent to 96 per cent, he said.

According to the minister, the Centre receives about 11 per cent of mineral revenue, while nearly 88 per cent accrues to states. He asserted that the proposed amendments would not result in revenue losses for any state.

Making the constitutional case for the legislation, Reddy cited Entry 54 of the Union List, under which Parliament has the power to regulate mines and mineral development in the public interest. He argued that taxation is an important policy instrument for regulating and developing the sector.

The Rajya Sabha rejected by voice vote an amendment moved by DMK MP Tiruchi Siva seeking to send the legislation to a Select Committee. Some Opposition MPs demanded a division on the amendment, but Chairman C.P. Radhakrishnan said a voting exercise could not be conducted amid the din in the House.

With parliamentary approval now secured, the amendment marks a significant step towards a more centralised framework for mineral taxation and regulation, with the government pitching uniformity and energy security as key pillars of the reform.