In News:

Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, seeking a more uniform and predictable fiscal framework by restricting State levies on mineral rights and mineral-bearing lands.

Key Provisions

• Union control: “Mineral-bearing lands” are explicitly brought under Union regulatory control.
• New Section 9D: States cannot impose tax, cess or other levies on mineral rights or mineral-bearing lands except as per conditions prescribed by the Centre.
• Past levies:Unpaid/unrecovered levies imposed before the amendment become invalid, while amounts already paid will not be refunded.
• Central rule-making: Amendment to Section 13 empowers the Centre to prescribe conditions/restrictions for future State levies.

Existing Constitutional Framework

• Entry 54, Union List: Parliament can regulate mines and mineral development when declared expedient in public interest.
• Entry 23, State List: State power over mines and mineral development, subject to Union legislation.
• Entry 50, State List: State taxation of mineral rights, subject to limitations imposed by Parliament.
• Entry 49, State List: Taxes on land, including mineral-bearing land.
• Royalty ≠ Tax: Supreme Court’s 2024 ruling held that royalty under the MMDR framework is not a tax, but a contractual payment for enjoying mineral rights.

Key Concern: Fiscal Federalism

The Bill follows the Supreme Court’s 2024 Mineral Area Development Authority v. Steel Authority of India judgment, which, by an 8:1 majority of a 9-judge Constitution Bench, upheld States’ competence to tax mineral rights and mineral-bearing lands. The Bill’s restrictions therefore raise questions concerning State fiscal autonomy, legislative competence and Centre-State relations.

What is the News ?

The Rajya Sabha approved the Mines and Minerals (Development and Regulation Amendment) Bill, 2023 which seeks larger participation of the private sector in mineral exploration and production, including that for sought-after lithium.

Facts About:

Key-highlights of the Bill

The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957.  The Act regulates the mining sector.  

Out of restrictions: The reform initiative in the Bill brings lithium out from the list of restrictive atomic minerals where permission to mine could only be granted by the Centre to government companies.

Welcomed private players: The change would allow auction of this critical mineral, used extensively for making batteries for electric vehicles, by the private sector.

Forestry clearance process: The amendment Bill will also dispense with the cumbersome forestry clearance process for mine reconnaissance and prospecting operations, making it easier for the private sector to participate in exploration of the country’s mineral resources.

Auction power: The Bill empowers the central government to exclusively auction mining lease and composite exploration licence for certain critical high value minerals such as gold, silver, platinum and copper.

Exploration licence: One of the major reforms proposed in the Bill is to introduce exploration licence for deep-seated and critical minerals. The exploration licence granted through auction will allow the licencee from private sectors to undertake “reconnaissance” and prospecting operations for critical and deep-seated minerals.

Composite mineral licence: The reform proposals in the amendment legislation also include allowing states to grant composite mineral licence without having to get central nod.

Fixing mineral-wise maximum area: It will also raise and fix mineral-wise maximum area limits for mineral concessions to provide larger and economically viable mines to investors.

• For prime minerals such as iron ore, the maximum area for prospecting licence and mining lease has been doubled to 50 sq. km and 20 sq. km respectively.
• This would allow private entries to get same land area for mining as was earlier being given to government companies and that also by the state governments itself without any need for central approval.

What are Critical Minerals?

• Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
• These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
• Based on their individual needs and strategic considerations, different countries create their own lists.

Recent government interventions

Mineral Security Partnership (MSP): India joined Mineral Security Partnership (MSP),a US-led collaboration that aims to catalyse public and private investment in critical mineral supply chains globally.

• The MSP includes Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, UK, the European Commission, Italy, and now India.

Identification of critical minerals: Recently, the Centre has identified ‘30 critical minerals’, which are essential for the country’s economic development and national security.

Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1947213