Open sesame for corporates?

Was the Mines and Minerals (Development and Regulation) Amendment Act 2026 rushed through in Parliament to benefit a handful of corporates?

Consider the speed with which such an important piece of legislation moved: introduced in the Lok Sabha on 10 August, passed by both Houses on 13 August and notified in the Gazette of India on 17 August.

You only have to read between the lines to see that a law presented as ushering in a uniform taxation regime for mining has been designed to write off lakhs of crores owed by large industrial houses to mineral-rich states including Jharkhand, Odisha, Karnataka and Kerala.

The scale of these liabilities emerged during Mineral Area Development Authority v. Steel Authority of India, heard in July 2024 by a nine-judge Supreme Court bench headed by then Chief Justice D.Y. Chandrachud. The Federation of Indian Mineral Industries argued that the mining industry stood to lose Rs 1.5 to 2 lakh crore due to tax arrears. Independent analysts believe the figure runs into trillions.

Jharkhand alone claims that central PSUs such as Eastern Coalfields Ltd and private mining companies owe the state approx. Rs 1.36 lakh crore in outstanding mining dues, land compensation and tax arrears.

In its landmark ruling, the Supreme Court upheld the right of mineral-rich states to levy taxes and cesses on mineral-bearing lands retrospectively from 1 April 2005. These arrears could be paid in instalments. The judgment also settled a 35-year-old controversy by holding that royalty paid by a mining leaseholder is not a tax but a contractual consideration for the enjoyment of mineral rights.

Jharkhand aggressively pursued and recovered Rs 200 crore from Bharat Coking Coal Ltd earlier this year; while Tata Steel disclosed a contingent liability of Rs 17,347 crore in its financial statements. Other mining companies and public sector undertakings faced substantial exposure.

Although state departments have not uniformly published company-wise liabilities for groups such as Adani, Aditya Birla and Vedanta, the amendment’s implications for the industry are considerable. Vedanta Resources, for example, was identified by credit-rating agencies, including Moody’s, as one of the worst hit by the judgment. The scale of its mining operations is evident from the Rs 6,249 crore the Vedanta Group paid in royalties during 2023-24.

The 2026 amendment dramatically changes this position. It restricts state governments from independently levying fresh taxes, cesses or local duties on mineral rights and mineral-bearing lands, bringing such lands under the Centre’s direct regulatory framework. A new ‘Section D’ prevents states from imposing separate local taxes or extra levies unless permitted by the Union government, and invalidates unpaid or uncollected tax demands that predate the amendment.

Effectively, it alters the balance of Centre-state fiscal relations and is incompatible with the federal structure envisaged by India’s Constitution.

Ranchi-based advocate Rashmi Katyayan, who specialises in revenue law and has represented the state of Jharkhand in several land-related cases, describes the Centre’s approach as “neo-colonialist”.

“They talk about following a trade equalisation policy, which means coal mined in Jharkhand will cost the same when sold in Kerala. Surely the state from where the minerals are extracted must remain the prime beneficiary?” he asks.

While the original mining Act empowered the Centre to regulate mines and mineral development, the amendment extends that authority to mineral-bearing lands. By taking away the states’ taxation power, it not only deprives them of a key source of income but also reduces their autonomy in channelling mining revenue towards social welfare.

The financial stakes are enormous. The Jharkhand Mineral Bearing Land Cess Act generated Rs 13,442 crore in 2025-26 (that’s 68 per cent of the state’s non-tax revenue and 11 per cent of its total revenue receipts). Odisha’s mining tax revenue is projected to reach Rs 53,000 crore in 2026-27, accounting for 75 per cent of its non-tax revenue. Over the last five years, Odisha has auctioned 79 mineral blocks, adding approx. Rs 87,000 crore to its kitty.

This revenue was intended for healthcare, education, social security, agriculture, sanitation and drinking water. The Orissa Rural Infrastructure and Socio-Economic Development Act, 2004, similarly imposed a tax of up to 20 per cent on the annual value of mineral-bearing lands to fund rural welfare programmes.

Supported by a strong monitoring framework, Chhattisgarh earned more than Rs 70,000 crore from minerals during the past five financial years. Karnataka earned around Rs 36,120 crore, Kerala Rs 550 crore and Uttarakhand Rs 4,600 crore from mineral royalties during the same period. These figures exclude minor minerals such as sand and boulders, which remain under state control.

The Department of Mines and Geology recorded a steady increase in revenue, from Rs 6,308 crore in 2021-22 to Rs 8,845 crore in 2025-26, aided by real-time tracking, digitisation and stricter e-auction compliance. Goa, in contrast, faced extreme volatility, recording near-zero digit figures between 2021 and 2023 after the Supreme Court cancelled its iron-ore leases, though earnings recovered over the following two years.

The Samyukta Kisan Morcha (SKM), an umbrella body of several farmers’ organisations, has demanded that the amendment be repealed. It has urged state governments to defend their federal rights and use their mining revenue for agrarian development, tribal welfare and productive employment. SKM believes the law is designed to attract foreign investment to the mining sector, including rare-earth extraction, and facilitate largescale exploitation of domestic mineral resources.

Katyayan points out that Jharkhand holds vast reserves of coal, iron ore, uranium, bauxite, mica and rare earths, spread across some of India’s oldest geological formations, including the Gondwana rocks. “We pay some of the highest GST, but these minerals are exported to other states for processing,” he said. “Local people are not the beneficiaries of this wealth.”

The argument of mining corporates, echoed in this amendment, is that revenues will increase if mineral-bearing lands are acquired quickly, more mining blocks are auctioned, and successful bidders receive environmental, forest and wildlife clearances promptly. But environmentalists say this is already causing a steady erosion of protective safeguards.

The Forest Rights Act, 2006, the Panchayats (Extension to Scheduled Areas) Act and environmental-impact assessments (EIAs) are frequently bypassed, with mandatory gram sabha consents acquired forcibly or simply faked. The disregard for regulatory norms has led to the displacement of lakhs of Adivasis, particularly in Odisha, Jharkhand and Chhattisgarh, where 70 per cent of India’s mines are located.

Environmentalists warn that deprived of taxation powers, mineral-rich states may be pushed to maximise mineral production in pursuit of short-term fiscal gains, accelerating the destruction of our forests, farmland, water bodies and wildlife habitat.

Sandeep Patnaik, an independent Odisha-based researcher on mines and forests says both Union and state governments are guilty: “PESA had made gram sabha consent mandatory. That is not being followed and local bureaucrats are a party to this. With most PSUs having been taken over or working closely with large corporate houses, tribal rights will be further eroded.”

Opposition is growing. The Biju Janata Dal (BJD) and India bloc parties have organised mass dharnas in Odisha, while local groups have threatened economic blockades. Jharkhand chief minister Hemant Soren, along with the Congress and Left parties, has launched demonstrations across Dhanbad and Ramgarh.

Leaders from Karnataka, Kerala and Tamil Nadu have also voiced their objections, warning that this amendment sets a dangerous precedent that violates Indian federalism, while throwing open India’s precious mineral wealth to private monopolies.