Review Mines Bill or face massive unrest, warns Hemant Soren and JMM

Jharkhand is likely to lose Rs 11,000 crore annually if the Mines and Minerals (Development and Regulation) Bill comes into effect, chief minister Hemant Soren said in separate letters to President Droupadi Murmu and Prime Minister Narendra Modi. Odisha, which is governed by the BJP, could face a similar or larger loss, while the Biju Janata Dal (BJD) opposed the Bill in Parliament. Congress Rajya Sabha MP from Tamil Nadu, Praveen Chakravarty, also opposed the Bill, saying it undermines the fiscal autonomy of states.

Chakravarthy told the media that Tamil Nadu earned Rs 4,000 crore in mining revenue in 2025-26, while the state’s 2026-27 Budget Estimates projected revenue of Rs 11,000 crore. The Tamil Nadu government planned to revise the value of mineral-bearing land and increase levies, but the Bill passed by Parliament would subject such measures to Union government approval. “The Bill is a direct assault on Tamil Nadu’s fiscal autonomy,” Chakravarthy said.

The Bill, it is feared, may lead to heavy financial losses for mineral-rich states such as Odisha, Jharkhand and Chhattisgarh. The Rajya Sabha passed the Bill on Thursday within minutes, as the Lok Sabha had done earlier. The Bill also seeks to override the effect of the Supreme Court’s 2024 nine-judge Bench ruling that upheld states’ power to levy taxes on mineral rights. The court held that states have this power, subject to limitations imposed by Parliament. Critics argue that the new legislation uses this constitutional limitation to curtail the states’ taxing powers.

Union mines minister G. Kishan Reddy defended the Bill, saying a uniform rate of tax, royalty and cess was necessary to provide certainty to investors and help keep inflation in check. He said varying taxes and levies imposed by different states on mineral rights and mineral-bearing land had placed a heavy burden on the sector, created uncertainty through unpredictable and retrospective levies, and led to wide variations in tax and cess rates.

“Excessive fiscal burden makes mining operations commercially unviable, discourages mineral extraction, adversely affects mineral production and in some cases, leads to closure of mines. Any additional and unpredictable costs disproportionately may lead to adverse impact on small- and medium-scale mining operators,” the minister claimed. What he left unsaid was that the union government made little effort to take mineral-bearing states into confidence and evolve a mechanism in consultation with them.

Besides the loss of revenue, the states are aggrieved because they believe their fiscal autonomy is being taken away by a centralising government in New Delhi. The nine-judge Supreme Court bench in 2024 while upholding the right of the states to impose levy and cess etc. on mining companies, had underscored that Governments ought to have adequate fiscal resources to discharge their constitutional responsibilities and the state legislatures must have the power to raise revenues to meet the growing fiscal expenditures and rein in the fiscal deficit.

Any dilution in the taxing powers of the state legislatures would impact their ability to raise revenues, which in turn will impede their ability to deliver welfare schemes and services to the people, the court had ruled. Even more significantly, the bench had stated that “fiscal federalism entails that the power of the States to levy taxes, subject to the limitations laid down by the Constitution must be secured from unconstitutional interference by Parliament”.

Jharkhand Mukti Morcha and chief minister Hemant Soren threatened to hit the streets if the Bill is not reviewed. Addressing party workers and the people, Soren on Thursday evening warned that the country would see a historic battle if the Bill is not withdrawn. How can Delhi decide how to tax our land and resources,

he asked rhetorically. Soren and the JMM also warned that decline in revenue would hit welfare schemes and cash transfers to women and the marginalised.

To provide the context, in the post-Covid year of 2021-22 Odisha collected Rs 1.79 lakh crore, Jharkhand Rs 2.79 crore and Chhattisgarh Rs 8.83 lakh crore through mining-related levies, primarily through royalty. Mining royalties are sensitive to global commodity prices and domestic demand. Chhattisgarh and Odisha’s surge in 2021–22 coincided with strong iron ore demand while Jharkhand earned a more modest revenue from coal.

The Mines and Minerals (Amendment) Bill, 2026 significantly curtails states’ ability to impose new taxes, cess, or levies on mineral rights and mineral-bearing lands. States will continue to collect royalties, but any additional fiscal impositions must comply with conditions prescribed by the central government, effectively centralising control over mining-related taxation. States can no longer impose independent taxes, cess, or other levies on mineral rights or mineral-bearing lands unless permitted under conditions set by the Centre. Any levy not deposited or recovered before the law’s commencement will be treated as invalid.