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GS Paper: GS2-02.Functions & responsibilities of the Union and the States; issues and challenges of federal structure;

  • Union Cabinet clears HC bench for Ladakh

    Why in the News

    The Union Cabinet has decided to establish a bench of the Jammu and Kashmir High Court in Ladakh, aimed at improving access to justice in the Union Territory. The decision answers a long-standing demand on judicial access at a point when the agitation in Ladakh is pressing a different set of demands on statehood, Sixth Schedule protection and an empowered legislature.

    What is a High Court bench?

    1. About: A High Court bench is a permanent sitting of a High Court at a place other than its principal seat, where judges hear cases arising from a defined territory.
    2. Purpose: A bench reduces the distance and cost of approaching the higher judiciary for litigants living far from the principal seat, without creating a separate High Court.
    3. How it is established: The place of the principal seat and of any other place of sitting is fixed by the President by notification, and the establishment of a bench ordinarily follows a proposal from the State or Union Territory government with the concurrence of the High Court’s Chief Justice and the Union Law Ministry.
    4. The court concerned: The Jammu and Kashmir High Court, renamed the High Court of Jammu and Kashmir and Ladakh, is the common High Court for the Union Territory of Jammu and Kashmir and the Union Territory of Ladakh under the Jammu and Kashmir Reorganisation Act, 2019.

    What is the Leh Apex Body?

    1. About: The Leh Apex Body is the umbrella platform of political, religious and social organisations from Leh district, formed to press Ladakh’s demands for constitutional safeguards.
    2. Role: It leads the Ladakh agitation jointly with the Kargil Democratic Alliance and negotiates with the Ministry of Home Affairs.

    What is the Kargil Democratic Alliance?

    1. About: The Kargil Democratic Alliance is the corresponding umbrella platform of political, religious and social organisations from Kargil district.
    2. Role: It negotiates alongside the Leh Apex Body, so the two districts present a single set of demands to the Centre.

    What does the decision do?

    1. The decision: The Union Cabinet decided to establish a bench of the Jammu and Kashmir High Court in Ladakh, announced by the Union Home Minister on 20 August 2026.
    2. Stated effect: The bench will enhance access to justice for citizens living in remote areas of Ladakh by reducing the time required to avail the legal services they are entitled to.
    3. Framing by the Centre: The announcement reaffirmed the Centre’s commitment to ensuring constitutional safeguards and the all-round development of the region.
    4. Response from the Union Territory: The Lieutenant Governor of Ladakh welcomed it as a historic decision and said it would ensure speedy justice and reaffirm commitment to the region’s development.
    5. The demand it answers: Officials said the bench is expected to address a long-standing demand for easier and faster access to the higher judiciary for people in Ladakh.

    Does a High Court bench answer what the Ladakh agitation is asking for?

    1. What the agitation seeks: Local stakeholders are seeking stronger safeguards in four areas: land, employment, culture and political representation.
    2. The non-negotiable demands: The Leh Apex Body and the Kargil Democratic Alliance submitted a memorandum listing three non-negotiable demands: financial powers for the proposed elected Ladakh Legislative Assembly, a separate Public Service Commission for jobs in the Union Territory, and unconditional withdrawal of all cases against those affected by the violence of 24 September last year.
    3. The gap: A judicial bench addresses the distance to the higher judiciary and does not touch legislative powers, recruitment autonomy or constitutional protection of land and culture.
    4. Why the timing matters: The announcement comes against the backdrop of continuing discussions over the political, administrative and constitutional future of Ladakh.
    5. What the Centre is offering instead: The Centre is exploring a Union Territory level legislative body under certain provisions of Article 371, rather than the Sixth Schedule extension the agitation has demanded.

    What happened in Leh on 24 September last year and what has followed?

    1. The incident: Four persons were killed and at least 50 injured in Leh when a protest demanding statehood and extension of Sixth Schedule protections turned violent and police opened fire on protesters.
    2. Cases registered: About 87 people were booked following the violence, of whom about nine were chargesheeted.
    3. Withdrawal of cases: The Ladakh administration announced that cases against 25 people will be withdrawn, with closure reports to be filed in court in due course.
    4. Further review: The Chief Secretary said the Director General of Police has been directed to review the cases of the remaining persons still under investigation, to identify others who did not have an active role.
    5. Official characterisation: The Chief Secretary termed the incident a blot on the pages of India’s history.
    6. Detention of the activist: Climate activist Sonam Wangchuk, who was on a hunger strike for nearly 35 days in support of Ladakh’s demands, called off his fast, and was booked under the National Security Act, 1980 and lodged in Jodhpur jail for six months.

    What is the Article 371 route being explored?

    1. The proposal: A Union Territory level legislative body is being envisaged for Ladakh under certain provisions of Article 371.
    2. Work in progress: The Ministry of Home Affairs is working with the Law Ministry to prepare a framework for the arrangement.
    3. Questions the framework must settle: The framework has to decide how the body will be elected, what powers it will hold and the shape of the executive.
    4. Next step: The discussions will be taken further in a formal structured meeting of the sub-committee, expected in the first week of September.
    5. The stated horizon: The Chief Secretary said these things will not happen overnight and that a new model will be established for Ladakh.

    Challenges to Ladakh’s Demand for Constitutional Safeguards

    1. Sixth Schedule applicability: The Sixth Schedule as it stands applies to tribal areas in Assam, Meghalaya, Tripura and Mizoram, so extending it to a Union Territory requires a constitutional amendment. Eg. The National Commission for Scheduled Tribes recommended Sixth Schedule inclusion for Ladakh in 2019, and the recommendation has not been acted upon.
    2. Union Territory without a legislature: Ladakh was constituted as a Union Territory without a legislature on 31 October 2019, so all law-making for it rests with Parliament and the administrator. Eg. The Jammu and Kashmir Reorganisation Act, 2019 gave a legislature to the Union Territory of Jammu and Kashmir and none to Ladakh.
    3. Employment and recruitment: Without a separate Public Service Commission, recruitment for Ladakh runs through arrangements that local stakeholders say do not reserve posts for residents. Eg. The demand for a dedicated Ladakh Public Service Commission is one of the three non-negotiable demands submitted to the Chief Secretary.
    4. Land and demographic protection: Absence of domicile-linked land restrictions is the core anxiety behind the safeguards demand. Eg. Leh and Kargil bodies have sought protection of land and culture alongside political representation in every round of talks.
    5. Trust deficit after the firing: Criminal proceedings against protesters continue during the talks, which constrains negotiation. Eg. Of about 87 people booked after the 24 September violence, cases against 25 are being withdrawn and the rest remain under review.
    6. Ecological limits on development: Ladakh is a cold desert with acute water stress, so development promises collide with carrying capacity. Eg. Leh town’s groundwater and spring-fed supply has come under strain from tourism growth and construction.
    7. Continuity of dialogue: Negotiations depend on periodic meetings without a statutory framework or timeline. Eg. The next round of talks with the Ministry of Home Affairs team is scheduled for the following month, with a sub-committee meeting expected in the first week of September.

    Conclusion

    The Union Cabinet has cleared a bench of the Jammu and Kashmir High Court for Ladakh, and the Lieutenant Governor has welcomed it as answering a long-standing demand on judicial access. The demands driving the agitation, statehood, Sixth Schedule protection, financial powers for an elected assembly and a separate Public Service Commission, remain unresolved. The Centre is preparing a framework for a Union Territory level legislative body under provisions of Article 371, with the Ministry of Home Affairs and the Law Ministry deciding its election method, powers and executive structure. The next milestone is a formal structured sub-committee meeting expected in the first week of September, ahead of the next round of talks with the Ministry of Home Affairs team.

    “[2025, GS2, 10] Discuss the nature of Jammu and Kashmir Legislative Assembly after the Jammu and Kashmir Reorganization Act, 2019. Briefly describe the powers and functions of the Assembly of the Union Territory of Jammu and Kashmir.”

  • Congress-ruled states to move court against new mines law

    Why in the News

    State governments where the Congress is in power are preparing to challenge the Mines and Minerals (Development and Regulation) Amendment Act, 2026 in the Supreme Court, on the ground that it undermines the rights of the States. The Act, passed by the House on 13 August 2026, seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands. That power was confirmed as belonging to the States by a nine judge Bench two years ago, so the dispute is over whether Parliament can legislate away a taxing entry the Court has read as independent.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. What it is: The Mines and Minerals (Development and Regulation) Act, 1957, referred to as the MMDR Act, is the parent law governing every mineral in India except petroleum and natural gas.
    2. The core split it creates: The State Government owns the mineral in its territory. The Central Government decides the rules, fixes the royalty rate for major minerals and, for some categories, conducts the auction.
    3. How a block reaches a miner: Someone auctions the block, the State signs the lease, and the company mines. The State signs the lease in every case, including where the Centre ran the auction.
    4. Where the money goes: Royalty, dead rent and the auction premium go to the State in every case, with offshore blocks the only exception.

    What is the current status of State taxing power over minerals in India?

    1. The settled position since 2024: A nine judge Bench of the Supreme Court in Mineral Area Development Authority v Steel Authority of India, decided eight to one in 2024, held that States hold an independent power under Entry 50 of the State List to levy taxes on mineral rights, and that the MMDR Act does not take that power away.
    2. The distinction the ruling rests on: Royalty is not a tax. It is consideration paid to the State as the owner of the mineral, which is why a State levy on mineral rights is a separate and additional exercise of power.
    3. What the ruling overturned: India Cement v State of Tamil Nadu (1990), which had held royalty to be a tax and State cesses on royalty to be beyond State competence, stands overruled.
    4. The recovery window: States may recover past dues from 1 April 2005, in instalments spread over twelve years beginning 1 April 2026, without interest or penalty on the earlier period.
    5. What the ruling did not give the States: It conferred a power to tax mineral rights, not a power to fix the royalty rate. Royalty rates for major minerals continue to be set centrally under the Second Schedule to the MMDR Act.
    6. What the 2026 amendment now does to that position: The Act passed on 13 August 2026 seeks to curb the power of States to levy taxes on mineral rights and mineral bearing lands, which is the power the 2024 ruling had recognised.

    Constitutional Provisions Related to Mineral Rights and Legislative Competence

    1. Entry 54, Union List: Regulation of mines and mineral development, to the extent that Parliament by law declares such Union control to be expedient in the public interest.
    2. Entry 23, State List: Regulation of mines and mineral development, expressly made subject to the provisions of Entry 54 of the Union List.
    3. Entry 50, State List: Taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development.
    4. Entry 49, State List: Taxes on lands and buildings, the entry under which States tax mineral bearing land.
    5. Entry 55, Union List: Regulation of labour and safety in mines and oilfields.
    6. Article 297: Vests in the Union all lands, minerals and other things of value underlying the ocean within the territorial waters, the continental shelf and the exclusive economic zone.
    7. Article 246: Distributes legislative power between Parliament and the State legislatures across the three Lists.
    8. Article 265: Provides that no tax shall be levied or collected except by authority of law.
    9. Article 131: Confers original jurisdiction on the Supreme Court in a dispute between the Government of India and one or more States, the route through which a State sues over a central statute.

    What is royalty on minerals?

    1. What it is: Royalty is the payment a lessee makes to the owner of the mineral for the mineral removed or consumed, calculated mostly on an ad valorem basis on the average sale price published by the Indian Bureau of Mines.
    2. Who sets it and who receives it: The Centre fixes the rate for major minerals through the Second Schedule to the MMDR Act, and the State fixes it for minor minerals. The State Government receives it in both cases.

    What is a minor mineral?

    1. The statutory definition: Section 3(e) of the MMDR Act names building stones, gravel, ordinary clay and ordinary sand as minor minerals, and allows the Centre to notify any other mineral as minor. Everything not notified as minor is a major mineral, defined negatively with no positive list.
    2. Who controls them: Section 15 gives States exclusive power to frame minor mineral rules and to fix minor mineral royalty, so the Centre’s power over minor minerals is limited to deciding what enters the category.

    What does the Mines and Minerals (Development and Regulation) Amendment Act, 2026 change?

    1. The core change: The Act seeks to curb the power of States to levy taxes on mineral rights and on mineral bearing lands.
    2. The scope claimed for it: The Centre states that it is seeking to regulate only major minerals such as coal, limestone, iron ore, copper and manganese.
    3. What is stated to be left untouched: The States would continue to have powers over 49 minor minerals.
    4. The stated purpose: The Union Minister of Mines told the Rajya Sabha that the legislation does not seek to interfere with the autonomy or revenue rights of States, and that it aims only to ensure uniform mineral rates across the country.
    5. The stage it has reached: The Act was passed by the House on 13 August 2026.

    Which States are challenging the Act and on what ground?

    1. The States on board: Karnataka, Telangana and Himachal Pradesh are already committed to challenging the amendment Act in the Supreme Court.
    2. The State still being negotiated: The Congress is in talks with its ally the Jharkhand Mukti Morcha to get the Jharkhand government to join the challenge.
    3. The stated ground: The party alleges that the law undermines the rights of the States.
    4. The demand short of litigation: The Karnataka Deputy Chief Minister urged the Centre to withdraw the amendment Act, objecting to its restrictive provisions.
    5. The federal framing from Kerala: The Kerala Chief Minister stated that the amendments to the Act are against federal principles.

    How can a State challenge a central law?

    1. The original suit route: A State may institute an original suit against the Government of India in the Supreme Court under Article 131, which is the route available where the dispute involves a question on which a legal right of the State depends.
    2. The writ route is not open to a State in the same way: Article 32 is a remedy for enforcement of fundamental rights, and a State is not a person entitled to fundamental rights, so a State ordinarily proceeds under Article 131 rather than Article 32.
    3. Why the choice of route matters here: An Article 131 suit frames the matter as a Centre State dispute over legislative competence rather than as a grievance of an affected mining company.
    4. The competence question that will be argued: The dispute turns on whether the 2026 Act is a limitation of the kind Entry 50 permits Parliament to impose, or an extinguishing of the entry itself.
    5. The precedent that will be relied on: The 2024 nine judge ruling held that the MMDR Act as it then stood did not take away the Entry 50 power, which leaves open whether a later Act can impose limitations that empty it.

    Major debates surrounding State taxation of mineral rights

    1. Ownership against regulation: The State owns the mineral and receives the royalty, while the Centre fixes the rate and writes the rules, so the party bearing the social and environmental cost of mining does not set the price of it.
    2. Competing readings of one entry: Entry 50 is read either as a State power with a boundary Parliament may draw, or as a power Parliament may narrow until nothing is left of it.
    3. A tax entry against a regulatory entry: Entry 54 of the Union List is a regulatory entry over mineral development, and the question is whether a regulatory power carries with it the power to restrict a taxing entry in the State List.
    4. Two landmark rulings in tension: India Cement (1990) treated royalty as a tax and denied State competence, and Mineral Area Development Authority (2024) treated royalty as consideration and affirmed it, so the sector has operated under opposite rules within one generation.
    5. Uniform rates against fiscal autonomy: Uniform mineral rates across the country lower input cost volatility for steel, aluminium, cement and power, and remove a revenue instrument from the States where those minerals lie.
    6. The retrospective recovery question: Permitting recovery of dues from 1 April 2005 in instalments from 1 April 2026 exposes mineral users to a large accumulated liability, which is the practical trigger for legislative intervention.
    7. The empirical gap the dispute turns on: There is no agreed estimate of what the recovered dues and future State levies would add to the delivered cost of coal, iron ore and limestone, so both the revenue claim and the input cost claim rest on projections.

    Challenges to the new mineral taxation framework

    1. A single change alters two revenue streams at once: Curbing taxes on mineral rights and on mineral bearing lands touches Entry 50 and Entry 49 together, so States lose both an activity based and a property based levy. Eg. Several mineral States had begun framing levies immediately after the 2024 ruling recognised the Entry 50 power.
    2. Litigation freezes revenue planning on both sides: States cannot budget on a levy under challenge, and miners cannot provide for a liability that may be extinguished. Eg. Karnataka, Telangana and Himachal Pradesh have already committed to moving the Supreme Court against the Act.
    3. Uniform national rates ignore differences in deposit quality: A single rate across States taxes a high grade and a low grade deposit identically, which penalises the State with the harder ore body. Eg. Iron ore grades differ sharply between Odisha, Karnataka and Goa, with different beneficiation costs.
    4. The retrospective window collides with the amendment: Recovery of dues from 1 April 2005 was to start in instalments from 1 April 2026, the same period in which the curbing Act was passed. Eg. The twelve year instalment schedule the Court allowed begins precisely when the new restriction takes effect.
    5. The distinction between royalty and tax remains contestable in practice: A State levy structured on the royalty amount can be characterised as a tax on mineral rights or as a levy on land, which invites classification disputes at every notification. Eg. District Mineral Foundation contributions are already computed on the royalty amount rather than on sale value.
    6. Mining States bear the externalities regardless of the tax outcome: Land degradation, dust pollution, groundwater disruption and displacement fall on the district whether or not the State can levy. Eg. The mineral belt overlaps the Fifth Schedule tribal belt almost exactly.
    7. Investment decisions stall while competence is unsettled: Long gestation mining projects require certainty on the total payment stack over a fifty year lease. Eg. A mining lease under the MMDR Act runs for fifty years, far longer than the litigation cycle over the levy.

    Conclusion

    The Mines and Minerals (Development and Regulation) Amendment Act, 2026 has been passed by the House on 13 August 2026 and seeks to curb State powers to tax mineral rights and mineral bearing lands. The next step is a challenge in the Supreme Court, with Karnataka, Telangana and Himachal Pradesh committed and Jharkhand still under negotiation, and the source states no date for filing. The dispute is not about who owns the mineral, which is settled, but about whether a taxing entry in the State List can be narrowed by a central law made under a regulatory entry in the Union List. Until that is answered, the sector operates with two revenue claims on the same rupee.

    “[2025] Consider the following statements:

    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.

    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement I and Statement II are correct and Statement II explains Statement I

    (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I

    (c) Statement I is correct but Statement II is not correct

    (d) Statement I is not correct but Statement II is correct |

  • Punjab’s decade-long journey towards a formal sacrilege law

    Why in the News

    Punjab brought a stringent sacrilege law into force in April 2026 by amending an existing State statute on the ceremonial custody of the Guru Granth Sahib, avoiding the Presidential assent that had defeated three earlier attempts. The route exposes a conflict between a State's determination to legislate on religious sentiment and the constitutional limits set by secularism, equality, proportionality and the division of legislative competence. A challenge to the Act is pending before the Punjab and Haryana High Court.

    What does Punjab's 2026 sacrilege law do?

    1. What it penalises: It punishes sacrilege committed against the Guru Granth Sahib, and covers no other religious scripture.
    2. The sentence it carries: Its most serious provisions carry a mandatory minimum sentence extending to life imprisonment, leaving no room for a judge to calibrate punishment to the facts of a case.
    3. The statute it amends: It amends a pre existing State law concerned specifically with the ceremonial custody of the Guru Granth Sahib, rather than the central penal code.
    4. How it was brought into force: Because the State argued the amendment falls within its own legislative competence, it claimed no Presidential assent was needed, and the Governor's signature brought it into force in April 2026.

    What is the current status of sacrilege law in India?

    1. The central provision: Insulting religion or religious beliefs with deliberate and malicious intent is an offence under Section 299 of the Bharatiya Nyaya Sanhita, 2023, the successor to Section 295A of the Indian Penal Code, 1860.
    2. The settled constitutional position: Section 295A was upheld in Ramji Lal Modi, and the Supreme Court has not revisited that ruling in almost sixty years.
    3. The intent requirement on paper: Conviction requires proof of deliberate and malicious intent, a threshold the court reads into the provision.
    4. Where the practical harm falls: Indian criminal procedure allows a First Information Report to be lodged and an accused arrested well before any court examines whether that intent was present, so the chilling effect operates at the point of complaint, not at the point of conviction.
    5. No standalone national sacrilege statute: There is no separate central law on sacrilege beyond the religious offence provisions of the Bharatiya Nyaya Sanhita, 2023, which is why Punjab has repeatedly attempted a State law.

    Constitutional Provisions Related to Sacrilege, Speech and Secularism

    1. Article 14: Guarantees equality before the law, and permits classification only where an intelligible differentia bears a rational nexus to the law's stated purpose.
    2. Article 19(1)(a): Guarantees freedom of speech and expression to all citizens.
    3. Article 19(2): Permits reasonable restrictions on that freedom in the interests of public order, decency or morality, among other grounds.
    4. Article 21: Guarantees life and personal liberty, which the Supreme Court has read as requiring a just, fair and reasonable procedure.
    5. Article 25: Guarantees freedom of conscience and the free profession, practice and propagation of religion, subject to public order, morality and health, and permits the State to legislate for social welfare and reform even where this cuts against religious custom.
    6. Entry 1, Concurrent List, Seventh Schedule: Places criminal law within the legislative competence of both Parliament and the State legislatures.
    7. Article 254: Provides that a State law repugnant to a central enactment on the same Concurrent List subject is void to that extent.
    8. Article 254(2): Saves such a State law only where it has been reserved for and has received the assent of the President.

    How did Punjab arrive at this law across a decade?

    1. 2016, the first attempt: The then Akali Dal and Bharatiya Janata Party government passed a bill imposing life imprisonment for sacrilege committed specifically against the Guru Granth Sahib. The Centre returned it, objecting that a law protecting only one religion's scripture could not sit easily with India's secular Constitution.
    2. 2018, the second attempt: The succeeding Congress government extended the same life sentence to the Guru Granth Sahib, the Bhagavad Gita, the Quran and the Bible, through a new Section 295AA of the penal code. That Bill was also returned without Presidential assent.
    3. July 2025, the third attempt: The Aam Aadmi Party government introduced the Punjab Prevention of Offences Against Holy Scripture(s) Bill, again covering all four texts, with sentences ranging from ten years to life. It was sent to a select committee and has since been effectively shelved.
    4. April 2026, the successful route: The State abandoned the amendment of the central penal code and instead amended an existing State statute on the ceremonial custody of the Guru Granth Sahib, bringing the law into force on the Governor's signature alone.
    5. The pattern the sequence shows: A State legislature has persistently tried, by one route or another, to entrench a sacrilege code of ever increasing severity, undeterred by repeated constitutional rebuffs.

    Why does a religion specific penal law run into the equality guarantee?

    1. The classification test it must pass: A provision drawing a line between one community's sacred text and every other's needs an intelligible differentia bearing a rational nexus to its stated purpose, the test the Supreme Court set out in State of West Bengal versus Anwar Ali Sarkar.
    2. Why the classification fails on its own terms: The Act's stated purpose is communal harmony, framed in terms of all communities, and singling out one faith's scripture does not serve a purpose framed in terms of all of them.
    3. The objection is not new: By protecting only the Guru Granth Sahib, the 2026 Act revives precisely the objection that sank the 2016 attempt.
    4. The pending litigation: In May 2026, the Anglican Church of India, through its Amritsar bishop, petitioned the Punjab and Haryana High Court arguing that the Act creates a religion specific penal regime violating equality before law, and sought both the quashing of the Act and a stay on its implementation.
    5. The standing wrinkle: The Bench reportedly questioned how a church whose own scripture the Act does not touch could claim to be aggrieved by it, a question that demonstrates the very defect alleged, since a law can discriminate in structure while leaving those it excludes without the conventional standing to challenge it. The petition remains pending.

    Why does the mandatory life sentence raise a proportionality problem?

    1. What the Act does: Its most serious provisions carry a mandatory minimum sentence extending to life imprisonment, removing all sentencing discretion from the trial judge.
    2. The controlling precedent: In Mithu versus State of Punjab, the Supreme Court struck down a different mandatory sentencing provision precisely because it stripped courts of discretion.
    3. The standard applied: Mithu applied the requirement of a just, fair and reasonable procedure that Maneka Gandhi versus Union of India had read into Article 21.
    4. The parallel is close: The earlier case also arose out of Punjab, which makes the comparison with the 2026 Act direct rather than analogical.
    5. Why proportionality matters here: Sacrilege covers conduct ranging from a deliberate desecration to an inadvertent act, and a single fixed maximum sentence prevents a court from distinguishing between them.

    Does the State have the legislative competence to enact this law?

    1. Where the subject sits: Criminal law sits on the Concurrent List, so both Parliament and the State legislature may legislate on it.
    2. The repugnancy rule: Article 254 makes a State law repugnant to a central enactment on the same subject void to that extent, and the Bharatiya Nyaya Sanhita, 2023 carries its own provisions on sacrilege and on outraging religious feeling.
    3. The only saving route: Article 254(2) saves such a State law only where it has received Presidential assent, which is the requirement that defeated the 2016 and 2018 Bills.
    4. How Punjab avoided it: The State amended a pre existing, ostensibly ceremonial statute rather than the Bharatiya Nyaya Sanhita directly, and argued that no assent was therefore needed.
    5. The challenge to that route: A petition before the Punjab and Haryana High Court argues that a life sentence is a matter of criminal law and cannot dodge central scrutiny merely by changing which statute book it sits in.

    Why does the free speech objection survive despite Ramji Lal Modi?

    1. The vagueness of the operative terms: Section 295A and its successor in the Bharatiya Nyaya Sanhita, 2023 rest on terms such as outrage, insult and religious feelings, policed after the fact by whichever officer receives the complaint.
    2. The precedent that should apply: In Shreya Singhal versus Union of India in 2015, the court struck down Section 66A of the Information Technology Act, 2000 in its entirety, holding that criminalising online messages using undefined terms such as offensive and menacing left the provision impermissibly vague, invited arbitrary enforcement and chilled protected speech in violation of Article 19(1)(a).
    3. The terms are no more precise: The words on which the religious offence provisions rest are as undefined as the words the court found fatal in Shreya Singhal.
    4. What the court has not done: It has never brought the Shreya Singhal reasoning to bear on Section 295A, whose constitutionality it settled in Ramji Lal Modi almost sixty years earlier and has not revisited since.
    5. The reason for the gap: The inconsistency reads as reluctance rather than principle, since it is easier to strike down a recent statute governing an unfamiliar medium than to unsettle an eighty year old precedent with a long and emotionally fraught history behind it.
    6. What the vagueness enables: A cartoon, a novel, a documentary or a stray remark on social media can all be made to fit the language of insult without any accompanying threat of actual disorder.

    Major debates surrounding sacrilege law

    1. Secularism as an unamendable limit: Secularism was declared part of the Constitution's unamendable basic structure in S.R. Bommai versus Union of India, precisely so that the State could neither favour a religion nor punish disrespect towards one, and a sacrilege law does the second.
    2. Religious freedom against religious reform: Article 25 protects the practice of religion and at the same time preserves the space for social reformers, sceptics and atheists to challenge religious practice, since the right is subject to public order, morality and health and the State may legislate for reform.
    3. Public order as a threshold or a label: One position requires an actual threat of disorder before speech may be punished, the other treats the giving of offence as itself a disturbance of public order.
    4. Ramji Lal Modi against Shreya Singhal: Two lines of authority now sit in tension, one upholding a vague religious offence provision and the other striking down a vague online speech provision on the same reasoning.
    5. Federal competence against local sentiment: A State legislature responding to local religious sentiment collides with a national criminal code and the Article 254 assent requirement designed to keep criminal law uniform.
    6. Deterrence against chilling effect: Severe sentences are defended as deterrence against desecration, and are opposed on the ground that the harm is inflicted at the stage of arrest, long before any court weighs intent.

    Challenges to enforcing a sacrilege law

    1. Undefined operative terms: Insult and outrage are not statutorily defined, so the same conduct produces prosecution in one district and none in another. e.g. Section 66A of the Information Technology Act, 2000 was struck down in Shreya Singhal in 2015 for exactly this defect.
    2. Arrest precedes adjudication of intent: A First Information Report can be registered and an accused arrested before any court tests the deliberate and malicious intent the offence requires. e.g. the 2026 Punjab Act's life sentence attaches to a charge that a magistrate never has to evaluate before custody begins.
    3. Selective protection invites litigation: Protecting one scripture and not others invites an equality challenge that can stall the law for years. e.g. the Anglican Church of India's May 2026 petition before the Punjab and Haryana High Court, still pending.
    4. No sentencing discretion: A mandatory minimum forces the same punishment on a deliberate desecration and an inadvertent act. e.g. Mithu versus State of Punjab struck down a mandatory sentencing provision for removing exactly this discretion.
    5. Repugnancy risk to the whole statute: A State criminal law that overlaps a central enactment is void to the extent of repugnancy unless it carries Presidential assent, so the entire Act can fall on a procedural ground. e.g. the 2016 and 2018 Punjab Bills were both returned without assent.
    6. Incentive for mob complaint: A severe penalty attached to a subjective standard makes the police complaint itself a weapon against critics, writers and artists. e.g. the returned 2018 Bill would have extended a life sentence to insult of four separate scriptures, multiplying the categories of complainant.
    7. Standing gap for excluded groups: A community whose scripture the law does not cover may be told it is not aggrieved, so the discrimination cannot be tested. e.g. the Punjab and Haryana High Court's question to the Amritsar bishop in the pending petition.

    Conclusion

    Punjab's 2026 Act carries three distinct constitutional infirmities at once: an equality defect under the Anwar Ali Sarkar test, a proportionality defect under Mithu, and a legislative competence defect under Article 254. Each of these is separate from the broader secularism objection that a State may neither favour a religion nor punish disrespect towards one. The petitions challenging the Act remain pending before the Punjab and Haryana High Court, and the next milestone is that court's decision on the quashing and stay applications.

    What is Secularism as a Constitutional Doctrine?

    1. About: Indian secularism requires the State to maintain equal distance from all religions, neither establishing nor favouring one, while retaining the power to regulate the secular aspects of religious practice.
    2. Rationale: It exists to secure equal citizenship in a society of multiple faiths, so that a citizen's legal standing does not vary with religious affiliation.
    3. Its constitutional status: It was declared part of the Constitution's unamendable basic structure in S.R. Bommai versus Union of India, and was written into the Preamble by the Forty second Amendment in 1976.
    4. Its distinguishing feature: Unlike a strict wall of separation, the Indian model allows positive State intervention in religion for social welfare and reform, which Article 25(2) expressly authorises.
    5. Where it is enforced: Articles 25 to 28 supply the operative provisions, and Article 15 and Article 16 bar religious discrimination by the State.

    Key Concerns Regarding Constitutional Secularism

    1. State regulation shading into State preference: The power to reform religious practice can be exercised unevenly across communities, converting regulation into favour.
    2. Religious offence provisions in a secular code: Criminal provisions protecting religious feelings require the State to adjudicate what counts as an insult to faith, a task secularism was meant to keep it out of.
    3. Uneven codification of personal law: Some communities' family law is codified and reviewable while others' is not, producing different legal protection for identically placed citizens.
    4. The essential religious practices test: Courts must decide what is essential to a religion before they may regulate it, drawing judges into theological determination.
    5. Local majoritarian legislation: State legislatures respond to locally dominant religious sentiment, so a nationally uniform standard fragments at the State level.
    6. Enforcement discretion at the police station: Where the offence turns on a subjective standard, the identity of the complainant rather than the conduct determines whether the law is invoked.

    Laws and Rules Governing Speech Restrictions in India

    Source: Backgrounder, Limits on Speech.docx

    1. Constitutional provision: Article 19(1)(a) guarantees free speech and Article 19(2) permits enumerated reasonable restrictions.
    2. Constitutional anchors for hate speech regulation: Article 14 on equality, Article 15 on non discrimination, Article 21 on dignity, Article 51A on the fundamental duty of harmony, and the Preambular value of fraternity.
    3. Bharatiya Nyaya Sanhita, 2023: Section 196 on promoting enmity between groups, Section 197 on imputations prejudicial to national integration, Section 299 on outraging religious feelings, and Section 356 on defamation.
    4. Section 152, effective from 1 July 2024, replaced Section 124A of the Indian Penal Code, 1860 and criminalises acts exciting secession, armed rebellion, subversive activities, separatist feelings or endangering sovereignty, unity and integrity, with punishment extending to life imprisonment.
    5. Representation of the People Act, 1951: Section 123(4) prohibits false statements about candidates during elections, and the Act carries the electoral speech restrictions.
    6. Information Technology Act, 2000 and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021: Govern online content, intermediary due diligence and takedown obligations.
    7. Cable Television Networks (Regulation) Act, 1995: Prohibits misleading and prohibited broadcast content under its Programme Code.
    8. Cinematograph Act, 1952: Governs film certification and censorship.
    9. Indecent Representation of Women (Prohibition) Act, 1986: Restricts indecent depiction of women in publications and advertisements.
    10. Kedar Nath Singh versus State of Bihar (1962): Sedition requires both a tendency to create disorder and incitement to violence, and vigorous criticism of government measures is protected.
    11. Shreya Singhal versus Union of India (2015): Distinguishes discussion, advocacy and incitement, protects discussion and advocacy even where unpopular, and holds that vague terms such as annoyance or inconvenience cannot be the basis for restricting speech.
    12. Amish Devgan versus Union of India (2020): Applies a three part contextual test of content, intent of the speaker and harm caused or likely to be caused, with public figures held to a higher standard.
    13. Ashwini Kumar Upadhyay versus Union of India (29 April 2026): The Supreme Court dismissed a batch of petitions seeking new hate speech laws, holding that creating criminal offences belongs exclusively to the legislature and that the existing framework is adequate, the real problem being an enforcement deficit.

    Back2Basics: S.R. Bommai versus Union of India

    1. What it is: A Supreme Court ruling of 1994 delivered by a nine judge bench, arising out of the dismissal of State governments and the imposition of President's Rule under Article 356.
    2. Its holding on federalism: It made the exercise of Article 356 justiciable, requiring the proclamation to rest on relevant material and permitting courts to restore a dismissed government.
    3. Its holding on secularism: It declared secularism a part of the Constitution's basic structure, and therefore beyond the amending power under Article 368.
    4. The consequence for State action: A State government acting against secularism can itself be a ground for action under Article 356.
    5. Why it governs this item: It is the authority for the proposition that the State may neither favour a religion nor punish disrespect towards one, which is the core objection to a scripture specific penal law.
    6. Its broader effect: It sharply reduced the routine use of President's Rule, which had been invoked over a hundred times before the ruling.

    Way Forward

    1. Legislate through the correct route: A State that wishes to create a criminal offence on a Concurrent List subject should reserve the Bill for Presidential assent under Article 254(2) rather than route it through a ceremonial statute.
    2. Protect all scriptures equally or none: A provision framed around communal harmony must apply uniformly across faiths to satisfy the intelligible differentia and rational nexus test.
    3. Restore sentencing discretion: Replacing the mandatory minimum with a graded range lets courts distinguish deliberate desecration from an inadvertent act, meeting the Mithu standard.
    4. Define the operative terms: Statutory definitions of insult and religious feelings, and an express requirement of proximate incitement, would reduce the vagueness Shreya Singhal identified as fatal.
    5. Insert a pre registration safeguard: Requiring a preliminary inquiry or prior sanction before a First Information Report is registered addresses the chilling effect that operates at the point of complaint.
    6. Refer Ramji Lal Modi for reconsideration: A larger bench revisiting the 1957 ruling in the light of Shreya Singhal would settle the doctrinal inconsistency that now runs through religious offence law.

    Matching Previous Year Question

    “[2025, GS2, 15 marks] Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India?”

  • Parliament curbs States’ power to tax mineral rights through MMDR Amendment Bill, 2026

    Why in the News

    Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, which restricts the power of States to impose levies on mineral rights and mineral bearing lands. The change follows a Supreme Court ruling that had upheld exactly that State taxing power and permitted recovery of arrears going back to 1 April 2005. A legislative measure aimed at investor certainty now sits directly against a judicially affirmed source of State revenue.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. Governing statute: The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) is the central law regulating the grant of mineral concessions and the development of mines in India. It is administered by the Ministry of Mines.
    2. Union declaration: Section 2 of the Act declares it expedient in the public interest that the Union take control of the regulation of mines and mineral development, which activates Parliament’s competence over the field.
    3. Concession regime: No person may undertake reconnaissance, prospecting or mining except under a licence or lease granted under the Act and the rules made under it.
    4. Auction based allocation: The 2015 amendment made auction the sole method for granting mineral concessions for major minerals, replacing discretionary allotment.
    5. Minor minerals carve out: Section 15 empowers State governments to frame rules for granting concessions in respect of minor minerals, while the power to notify a mineral as minor rests with the Central government.

    What is royalty in mining?

    1. Definition: Royalty is the payment a lessee makes to the State for the privilege of extracting and removing a mineral from the land, calculated per tonne or as a percentage of sale value.
    2. Statutory rates: Royalty rates for major minerals are fixed in the Second Schedule of the MMDR Act by the Central government, so a State cannot revise them on its own.

    What is a tax on mineral bearing land?

    1. Definition: A tax on mineral bearing land is a State levy imposed on the land itself, with the mineral yield of that land used as the measure of the tax.
    2. Distinct head: It is levied separately from royalty and from the auction premium a bidder pays to win a mine, and it is the head of levy the current amendment restricts.

    Current status of States’ power to tax mineral rights in India

    1. Judicially affirmed right: The Supreme Court upheld the right of States to impose taxes on mineral rights and mineral bearing lands, and separately permitted recovery of arrears going back to 1 April 2005.
    2. State levies already in force: Jharkhand imposed a mineral bearing land tax on iron ore at Rs 100 per tonne, subsequently hiked, and Tamil Nadu set a tax on limestone at Rs 160 per tonne.
    3. Scale of the levy structure: States impose 14 types of taxes, charges, fees and levies, including royalty and auction premium, and the rates of royalty and taxes vary across States.
    4. Statutory deductions already fixed centrally: Lessees additionally pay into the District Mineral Foundation (DMF) and the National Mineral Exploration Trust (NMET) at rates pegged to royalty, which the Centre sets.
    5. Position after the amendment: The new law restricts the State levies on mineral rights and mineral bearing lands, and a government fact sheet states that States will continue to receive the overwhelming share of mining revenue.

    Constitutional provisions related to the taxation of mineral rights

    1. Article 246 with the Seventh Schedule: Distributes legislative competence between Parliament and the State legislatures across the Union, State and Concurrent Lists.
    2. Entry 54, List I: Gives Parliament power over the regulation of mines and mineral development to the extent declared by law to be expedient in the public interest.
    3. Entry 23, List II: Gives States power over the regulation of mines and mineral development, expressly subject to Entry 54 of List I.
    4. Entry 50, List II: Gives States the power to levy taxes on mineral rights, expressly subject to any limitations imposed by Parliament by law relating to mineral development.
    5. Entry 49, List II: Gives States the power to levy taxes on lands and buildings, the head under which mineral bearing land taxes are framed.
    6. Article 265: Bars the levy or collection of any tax except by authority of law.

    Why has Parliament moved to restrict State levies?

    1. Certainty and predictability: The stated rationale is to provide greater certainty and predictability in the mining sector for project developers.
    2. Investment flows: A stable levy structure is intended to facilitate investment flows into a sector the Union treats as vital to growth.
    3. Cost pass through: Higher State levies feed into the price of minerals and therefore into infrastructure costs downstream.
    4. Price uniformity: The change is also read as a bid to bring some degree of uniformity in the prices of major minerals, since royalty and tax rates currently differ from State to State.
    5. Critical minerals push: The Union government has launched a critical mineral mission, and a more predictable framework is meant to support that programme.

    Why do States read the amendment as an erosion of fiscal federalism?

    1. Loss of an affirmed revenue head: States moved to raise revenue from mining only after the Supreme Court affirmed that they could, and the amendment removes that opening.
    2. Concentration of dependence: For mineral rich States such as Odisha, Jharkhand and Chhattisgarh, revenue from this channel accounts for a significant share of non tax revenue.
    3. Narrow revenue base: State governments already have limited avenues to raise resources on their own, so each restriction on a taxing head weighs heavily.
    4. Arrears at stake: The right to recover arrears from 1 April 2005 represented a large one time accrual that the restriction places in doubt.
    5. Centre State friction: The apprehension is expressed as a concern about State revenues in particular and fiscal federalism in general, which needs to be addressed rather than assumed away.

    What does the tax burden on Indian mining actually look like?

    1. Effective tax rate: The effective tax rate in India is higher than 50 percent of revenues, according to a report on States’ Best Practices in Mining by FIMI-EY.
    2. Comparative burden: The same report places the effective rate in other countries at 35 to 40 percent of revenues.
    3. Cumulative structure: The Indian figure is the result of stacking royalty, auction premium, statutory contributions and State levies, and not of any single rate.
    4. Rationalisation as the fix: Rationalisation of taxes and royalties is presented as the step that would facilitate greater investor interest in the sector.

    What do cross country comparisons show, and how far does the evidence go?

    1. Limits of the source evidence: The comparison offered is a single aggregate figure of 35 to 40 percent, with no individual country named, so it establishes a gap rather than a model to copy.
    2. Australia: Mineral royalties are a State subject, and Western Australia levies ad valorem royalties on iron ore without a federal ceiling on State rates.
    3. Chile: The mining royalty law of 2023 combines an ad valorem component with a margin linked component on large copper producers, and caps the combined burden on a firm.
    4. South Africa: The Mineral and Petroleum Resources Royalty Act, 2008 sets a formula based royalty that moves with the producer’s profitability and with whether the mineral is refined.
    5. Canada: Mining taxes are levied by provinces such as Ontario and Quebec on mine profits, layered above federal corporate income tax.

    Why does the amendment set investor certainty against a judicially affirmed State right?

    1. Reversal of an outcome, not of a principle: The Court affirmed the competence of States under the Constitution, and Parliament has used its own competence to restrict the exercise of that power.
    2. Two legitimate claims: A predictable national mining framework is a genuine requirement for large, long gestation projects. A stable taxing head is a genuine requirement for a State with few own revenue sources.
    3. Uniformity has a price: Uniform mineral prices across States are achieved by removing the very differentiation that reflected each State’s own fiscal need.
    4. Arrears create the sharpest edge: The recovery window from 1 April 2005 was the largest single revenue expectation created by the ruling, and it is the first casualty of the restriction.
    5. Assurance without a mechanism: The assurance that States will keep the overwhelming share of mining revenue rests on royalty and statutory contributions whose rates the Centre alone fixes.

    Major debates surrounding the taxation of mineral rights

    1. Is royalty a tax: A seven judge Bench in India Cement Ltd. v. State of Tamil Nadu (1989) held royalty to be a tax, and a nine judge Bench in Mineral Area Development Authority v. Steel Authority of India (2024) held by an 8 to 1 majority that royalty is a contractual consideration and not a tax, restoring the States’ Entry 50 power.
    2. Legislative override: The dispute is whether a statute that removes a taxing power after a ruling is a permissible change in the legal basis or an impermissible override of a binding judgment under Article 141.
    3. Retrospective recovery: Recovery of arrears from 1 April 2005 raises the question of whether long settled project economics can be reopened, against the States’ claim to revenue already lawfully due.
    4. Uniformity versus autonomy: National price uniformity for major minerals is set against the constitutional design that lets a State calibrate levies to its own resource endowment.
    5. Compensation gap: There is no settled empirical answer on what mineral rich States lose in absolute terms, since the 14 State levies are not reported on a common basis across States.

    Challenges to the mineral concession framework after the amendment

    1. Revenue substitution for mineral States: States losing a taxing head have no equivalent replacement within their own competence. e.g. Odisha, which draws a large part of its non tax revenue from mining, has no comparable own source levy to fall back on.
    2. Litigation risk: A statute narrowing a power the Court affirmed invites a fresh constitutional challenge, prolonging exactly the uncertainty the amendment targets. e.g. the India Cement to Mineral Area Development Authority sequence ran for 35 years before a settled answer emerged.
    3. Auction premium distortion: Aggressive premium bidding in auctions inflates costs regardless of tax rationalisation. e.g. several iron ore blocks in Odisha were won at premiums exceeding 100 percent of sale value, squeezing operating margins.
    4. Exploration deficit: Rationalising levies does not fix the shortage of drilled and proved resources that investors actually need. e.g. India has explored only a small fraction of its obvious geological potential area despite the National Mineral Exploration Trust being funded since 2015.
    5. Clearance and land bottlenecks: Forest, environment and land acquisition delays, not levy rates, hold up most mine starts. e.g. blocks in the Hasdeo Arand coalfield in Chhattisgarh have stalled for years over forest clearance and Gram Sabha consent.
    6. District Mineral Foundation utilisation: Funds meant for mining affected communities remain unspent or diverted, weakening the social licence for expansion. e.g. DMF collections have exceeded Rs 1 lakh crore cumulatively, with large unspent balances reported in mineral rich districts.
    7. Critical mineral import dependence: Domestic levy reform does not address dependence on imported processed minerals. e.g. India imports the bulk of its lithium and cobalt requirements for battery manufacturing.

    Conclusion

    Parliament has restricted the States’ power to tax mineral rights and mineral bearing lands, undoing in law the revenue consequence of a ruling that had affirmed that power and allowed arrears from 1 April 2005. Investor certainty has been purchased with the tax autonomy of the States that hold the minerals, and the assurance that States keep the overwhelming share of mining revenue rests on rates the Centre alone sets. The measure has been passed by both Houses of Parliament; the source states no further date or next step beyond that stage. Resolving the resulting Centre State friction, not the levy structure alone, is what will determine whether the new framework actually attracts investment.

    Foundational Context: Mining in India

    1. Scale of the sector: India produces 95 minerals, covering fuel, metallic, non metallic, atomic and minor minerals, and mining contributes roughly 2.5 percent of Gross Domestic Product (GDP) including the associated quarrying activity.
    2. Global standing: India is among the world’s largest producers of coal, iron ore, bauxite, chromite and mica, and is the second largest coal producer globally.
    3. Ownership principle: Minerals vest in the State government where they occur, except in offshore areas and for atomic minerals, where they vest in the Union.
    4. Classification: Minerals are divided into major minerals and minor minerals, with minor minerals such as sand, ordinary clay and building stone regulated by State rules under Section 15 of the MMDR Act.
    5. Institutional set up: The Geological Survey of India (GSI) carries out regional exploration, the Indian Bureau of Mines (IBM) oversees conservation and scientific mining, and the Directorate General of Mines Safety (DGMS) regulates safety.

    Constitutional Framework Governing Mineral Taxation and Federal Finance

    1. Article 245: Sets the territorial extent of laws made by Parliament and by State legislatures.
    2. Article 246: Distributes legislative power across the three Lists of the Seventh Schedule.
    3. Entry 54, List I: Union control over the regulation of mines and mineral development to the extent declared by Parliament.
    4. Entry 23, List II: State power over regulation of mines and mineral development, subject to Entry 54 of List I.
    5. Entry 50, List II: State power to tax mineral rights, subject to limitations imposed by Parliament by a law relating to mineral development.
    6. Entry 49, List II: State power to tax lands and buildings.
    7. Article 141: Makes the law declared by the Supreme Court binding on all courts within India.
    8. Article 265: Bars levy or collection of any tax except by authority of law.
    9. Article 280: Provides for the Finance Commission, which recommends the sharing of Union taxes with the States.

    Laws and Rules Governing Mining in India

    1. Mines and Minerals (Development and Regulation) Act, 1957: The parent statute for mineral concessions and mineral development.
    2. Second Schedule: Fixes royalty rates for major minerals centrally.
    3. Section 15: Empowers States to make rules for minor mineral concessions.
    4. MMDR Amendment Act, 2015: Introduced auction as the sole route for granting major mineral concessions.
    5. Section 9B and Section 9C: Created the District Mineral Foundation for mining affected communities and the National Mineral Exploration Trust for exploration funding.
    6. MMDR Amendment Act, 2021: Removed the distinction between captive and merchant mines and eased the transfer of mineral concessions.
    7. MMDR Amendment Act, 2023: Created the exploration licence for deep seated minerals and empowered the Centre to exclusively auction 24 critical and strategic minerals.
    8. MMDR Amendment Act, 2025: Widened support for critical mineral recovery, including recovery from mine waste and tailings.
    9. Mines Act, 1952: Governs the health, safety and working conditions of persons employed in mines.
    10. Offshore Areas Mineral (Development and Regulation) Act, 2002: Regulates mineral development in India’s territorial waters and exclusive economic zone.
    11. Mineral Conservation and Development Rules, 2017: Prescribe scientific mining, conservation and mine closure obligations.
    12. Minerals (Evidence of Mineral Contents) Rules, 2015 and Mineral (Auction) Rules, 2015: Govern the exploration thresholds and the auction procedure for major minerals.

    Back2Basics: National Critical Mineral Mission

    1. What it is: A central mission to build self reliance across the critical mineral value chain, from exploration and mining to processing, recycling and recovery from waste.
    2. Approved: By the Union Cabinet in January 2025.
    3. Administering ministry: The Ministry of Mines.
    4. Duration: Covers the period from 2024-25 to 2030-31.
    5. Outlay: An outlay of about Rs 16,300 crore, with a further expected investment of about Rs 18,000 crore by public sector undertakings and other agencies.
    6. Exploration target: A large programme of exploration projects by the Geological Survey of India within India, along with exploration in offshore areas.
    7. Overseas component: Acquisition of critical mineral assets abroad by Indian public and private entities, supported by trade and diplomatic engagement.
    8. Circularity component: Promotion of recycling of end of life products and recovery of critical minerals from mine tailings and overburden.
    9. Stockpiling: Creation of a stockpile of critical minerals to insulate domestic industry from supply disruption.
    10. Regulatory support: Fast tracking of regulatory approvals for critical mineral projects, alongside the exclusive Central auction of the notified critical and strategic minerals.

    Government Initiatives

    1. National Critical Mineral Mission: Secures the critical mineral supply chain through domestic exploration, overseas asset acquisition, recycling and stockpiling under the Ministry of Mines.
    2. National Mineral Policy, 2019: Sets the policy framework for sustainable mining, exploration incentives and a transparent auction regime.
    3. Star Rating of Mines: A self assessment and verification system run by the Indian Bureau of Mines rating mines on scientific mining and sustainability parameters.
    4. Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY): Implemented through District Mineral Foundations to fund drinking water, health, education and livelihood works in mining affected districts.
    5. National Geoscience Data Repository and the exploration licence regime: Open access geoscience data and a dedicated licence to draw private explorers into deep seated mineral search.

    Key Facts about Indian Mining

    1. Ministry: The Ministry of Mines administers the MMDR Act, other than for coal, lignite, petroleum, natural gas and atomic minerals.
    2. Critical minerals list: India notified a list of 30 critical minerals in 2023, of which 24 are auctioned exclusively by the Centre.
    3. District Mineral Foundation contribution: Lessees contribute 10 percent of royalty for concessions granted after 12 January 2015 and 30 percent for earlier concessions.
    4. National Mineral Exploration Trust contribution: Set at 2 percent of royalty paid by the lessee.
    5. Geological Survey of India: Established in 1851, headquartered at Kolkata, and the principal agency for regional mineral exploration.

    Challenges in the Mining Sector

    1. Long clearance timelines: A block cleared at auction still waits years for forest, environment and consent approvals. e.g. bauxite mining in the Niyamgiri hills of Odisha was halted after Gram Sabhas exercised their veto under forest rights law.
    2. Illegal mining: Unregulated extraction of minor minerals erodes State revenue and damages river systems. e.g. sand mining in the Yamuna and Sone river beds has repeatedly drawn National Green Tribunal intervention.
    3. Rehabilitation deficit: Displacement from large mines is inadequately compensated and land losers rarely regain livelihoods. e.g. displacement in the Talcher and Ib Valley coalfields of Odisha has produced long running resettlement disputes.
    4. Mine safety: Accidents in underground and rat hole operations continue despite the Mines Act framework. e.g. the Ksan mine flooding in Meghalaya in December 2018 trapped and killed rat hole miners in an illegal coal pit.
    5. Low value addition: India exports raw and semi processed ore and imports finished products. e.g. iron ore fines are exported while high grade steel inputs are imported back.
    6. Exploration underinvestment: Private participation in greenfield exploration remains thin despite the exploration licence. e.g. only a small share of India’s obvious geological potential area has been explored in detail.
    7. Import dependence in critical minerals: Processing capacity, not deposits alone, is the binding constraint. e.g. India relies on imports for nearly all its rare earth magnet requirements.

    Way Forward

    1. Institutionalise Centre State consultation on levies: Route mineral levy changes through a standing Centre State forum so that revenue impacts are quantified before a restriction is legislated.
    2. Publish a common levy dashboard: Report the 14 State levies on a uniform basis so that the effective tax rate claim of over 50 percent of revenues can be verified block by block.
    3. Compensate the transition: Provide a time bound, formula based transfer to mineral rich States for the revenue head withdrawn, on the model used for other tax transitions.
    4. Rationalise auction premium: Cap or stagger premium payments so that the auction price, rather than the tax rate, stops inflating the delivered cost of minerals.
    5. Front load exploration: Expand National Mineral Exploration Trust funded drilling and release geoscience data before auction so that bids reflect proved resources.
    6. Ring fence District Mineral Foundation spending: Enforce end use audit of DMF funds on drinking water, health and education in mining affected districts to rebuild the social licence for expansion.

    “[2025] Consider the following statements:
    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.
    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.
    Which one of the following is correct in respect of the above statements?
    (a) Both Statement I and Statement II are correct and Statement II explains Statement I
    (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I
    (c) Statement I is correct but Statement II is not correct
    (d) Statement I is not correct but Statement II is correct

  • The Centre-states tussle over the Mines and Minerals Bill

    Why in the News

    Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 last week, barring States from imposing specified levies on mineral rights and on mineral bearing land. The bar removes the very taxing power the Supreme Court had affirmed for States on 25 July 2024. Mineral bearing States say the change strips out a revenue stream they control fully, while the Centre says uncapped State levies raise the cost of minerals for the whole economy.

    What is the Mines and Minerals (Development and Regulation) Amendment Bill, 2026?

    1. About: It amends the Mines and Minerals (Development and Regulation) Act, 1957, the parent law governing grant of mineral concessions and regulation of mines.
    2. Core bar: It restricts States from imposing specified levies on mineral rights and on mineral bearing land.
    3. Extinguishment of past dues: It wipes out unpaid or unrecovered dues arising from such levies imposed before the amendment comes into force.
    4. Scale of the dues: Estimates place outstanding dues of this kind across the mining sector at about Rs 2 lakh crore.
    5. Ceiling design: Mines Ministry officials state that about 14 levies in the mineral sector will survive, subject to a combined percentage ceiling.
    6. Stated purpose: The Centre frames the measure as fiscal certainty for mining companies over their total statutory burden.

    What is royalty on minerals?

    1. About: Royalty is the payment a lease holder makes to the State government for every unit of mineral extracted under a mining lease.
    2. Who fixes it: Rates are specified in the Schedules to the Mines and Minerals (Development and Regulation) Act, 1957 and revised by the Union government, not by the State that receives the money.

    What is the District Mineral Foundation?

    1. About: A non profit trust set up in every mining affected district, funded by a statutory contribution from lease holders, created by the 2015 amendment.
    2. Use of funds: Money is spent on people and areas affected by mining under the Pradhan Mantri Khanij Kshetra Kalyan Yojana.

    What is the National Mineral Exploration Trust?

    1. About: A trust created by the 2015 amendment and funded by a contribution equal to 2 per cent of royalty paid by lease holders.
    2. Use of funds: It finances regional and detailed mineral exploration through accredited agencies.

    What is the current status of State powers to tax mineral rights in India?

    1. Judicial position: A nine judge Constitution Bench held on 25 July 2024 that States hold legislative competence to tax mineral rights and mineral bearing land.
    2. Precedent overruled: That ruling overruled India Cement Ltd v State of Tamil Nadu (1989), which had treated royalty as a tax and placed the subject beyond State competence.
    3. Statutory position now: The 2026 amendment bars the specified levies, so a power the Court restored stands narrowed by ordinary legislation.
    4. Levies that survive: About 14 levies continue, including environmental and pollution cesses, subject to a combined ceiling still to be fixed.
    5. Centrally fixed payments: Royalty, District Mineral Foundation contributions and National Mineral Exploration Trust contributions remain set under central law.
    6. Effect on accrued claims: Levies imposed before commencement lose their recoverability, so demands already raised become unenforceable.

    Constitutional Provisions Related to taxation of mineral rights

    1. Article 246: Distributes legislative power between Parliament and State legislatures through the three lists of the Seventh Schedule.
    2. Entry 54, Union List: Regulation of mines and mineral development to the extent Parliament declares expedient in the public interest.
    3. Entry 23, State List: Regulation of mines and mineral development, expressly subject to Entry 54 of the Union List.
    4. Entry 49, State List: Taxes on lands and buildings, the entry States have relied on for a mineral bearing land cess.
    5. Entry 50, State List: Taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development.
    6. Article 265: Bars the levy or collection of any tax except by authority of law.
    7. Article 300A: Bars deprivation of property save by authority of law, the provision invoked when accrued statutory dues are extinguished.
    8. Article 39(b): Directs the State to ensure that ownership and control of material resources are distributed to subserve the common good.

    Why does the 25 July 2024 ruling sit at the centre of the dispute?

    1. What was decided: The Court upheld the power of States to tax mineral rights and mineral bearing land as a distinct field from royalty.
    2. What was overruled: The 1989 India Cement position, that royalty is itself a tax, had blocked States from taxing the same subject for 35 years.
    3. What States did next: Several mineral bearing States began framing fresh cesses on mineral bearing land after the judgment.
    4. What the Centre saw: Mines Ministry officials describe the resulting levies as excessive cesses stacked on top of existing statutory payments.
    5. How Parliament responded: The amendment uses the limitation power built into Entry 50 to restrict what the Court had permitted.

    Why do mineral bearing States say the Bill damages their finances?

    1. Dependence on mining: Mining revenue accounted for about 84.9 per cent of Jharkhand’s own non tax revenue in the 2024 to 2025 financial year.
    2. Forgone cess: The Mineral Bearing Land Cess was expected to yield about Rs 11,000 crore a year for Jharkhand alone.
    3. Dues written off: Outstanding dues across the mining sector estimated at about Rs 2 lakh crore cease to be recoverable.
    4. Fiscal capacity argument: The Jharkhand Chief Minister wrote to the Prime Minister that mineral revenues are a critical component of the State’s fiscal capacity and not marginal receipts.
    5. Federal objection: The Kerala Chief Minister has raised concerns over the implications of the amendment for India’s federal structure.
    6. Political response: Jharkhand has threatened protests against the amendments.

    What is the Centre’s case for restricting State levies?

    1. Cost of key minerals: Unchecked State levies raise mineral prices and feed into inflation and infrastructure costs.
    2. Predictability for industry: A single combined ceiling gives mining companies certainty over their total fiscal burden across States.
    3. Cumulative burden: Companies already pay royalty, District Mineral Foundation and National Mineral Exploration Trust contributions and environmental and pollution cesses.
    4. The largest single addition: Industry assessment identifies the mineral bearing land tax as the biggest additional burden of the recent levies.
    5. A ceiling, not abolition: About 14 levies survive, with the combined percentage to be fixed after consulting all States.
    6. Limited realised loss: Industry view holds that most of these levies were legally contested for decades, so little was actually collected.

    Does fiscal certainty for industry justify overriding a power the Court has just affirmed?

    1. Two legitimate claims: Investment certainty in a capital heavy sector sits against the fiscal autonomy of the States that hold the minerals.
    2. A judicial gain reversed: States won the power in 2024 and lost its practical use in 2026 without any change in the constitutional text.
    3. The retrospective element: Extinguishing accrued dues removes revenue already claimed, which goes further than limiting future levies.
    4. Sequence of consultation: The ceiling is to be fixed after the bar is enacted, so States negotiate the number after losing their leverage.
    5. Who gains and who pays: The saving accrues to mining companies and mineral consuming States, the loss falls on a small group of mineral bearing States.
    6. Cost borne locally: Land loss, displacement and pollution stay with the producing State even after its claim on the rent is narrowed.

    Major debates surrounding taxation of mineral rights

    1. Royalty as tax or as consideration: India Cement treated royalty as a tax, the 2024 ruling treated it as contractual consideration, and that classification decides State competence.
    2. Reach of the Entry 50 limitation: How far Parliament may hollow out a State taxing entry through a limitation clause remains legally contested.
    3. Recovery of past dues: The 2024 ruling allowed staggered recovery of past demands, the amendment extinguishes them outright.
    4. Producer against consumer States: Mineral bearing States argue they carry the ecological and social cost while value addition and tax revenue accrue elsewhere.
    5. Cooperative against unilateral federalism: The Centre frames the change as integration of a national market, States frame it as unilateral action on their own revenue base.
    6. Deepening vertical fiscal imbalance: Non tax mineral revenue is one of the few sources States control fully, so its removal raises dependence on central transfers.

    Challenges to the Mines and Minerals Amendment Bill

    1. Litigation risk: States can challenge the bar and the extinguishment of accrued dues as a colourable exercise of legislative power. e.g. Jharkhand and Kerala both registered formal objections within days of the Bill’s passage in August 2026.
    2. Concentrated revenue shock: A small set of States carries almost the entire loss. e.g. Odisha and Jharkhand together account for the bulk of India’s iron ore and coal output.
    3. Undecided ceiling: The combined percentage is unfixed at the point of enactment, leaving States unable to plan budgets. e.g. the Mines Ministry states only that the figure will follow consultation with all States.
    4. Weak district level spending: Money already collected for mining affected areas is poorly used. e.g. audits have repeatedly flagged large unspent District Mineral Foundation balances in mining districts.
    5. Unpriced ecological damage: Removing land based levies weakens the price signal for land degradation. e.g. the Shah Commission findings preceded the suspension of iron ore mining in Goa in 2012.
    6. Certainty alone does not unlock supply: Fiscal predictability does not resolve clearance and land bottlenecks. e.g. several auctioned coal blocks remain unoperationalised for want of forest clearance.
    7. Weak consultation machinery: Resource disputes between the Union and States lack a standing forum for settlement. e.g. the Inter State Council has met only rarely since its creation in 1990.

    Conclusion

    The dispute is about who captures the rent from a fixed natural resource, not about the rate of any single cess. Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, and the measure now moves to Presidential assent and commencement. The next concrete step named by the Mines Ministry is fixing the combined percentage ceiling on the roughly 14 surviving levies after consulting all States. Until that ceiling is notified, mineral bearing States carry a quantified loss against an unquantified entitlement.

    “[2025, GS2, 15 marks] Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India?”

  • India’s Extradition Push: States Told to Prepare for Fugitive Returns

    Why in the News

    The Ministry of Home Affairs (MHA) has asked all States and Union Territories to process extradition requests for fugitives abroad without delay, and to develop prison facilities in central jails that meet international standards. The instruction locates the failure inside India’s own investigating agencies rather than only in foreign courts. India has brought back 274 fugitives from 36 countries since 2021.

    What is extradition?

    1. About: Extradition is the formal surrender of a person by one state to another for trial or for serving a sentence in the requesting state.
    2. Legal basis: It operates through the Extradition Act, 1962 read with a bilateral treaty or a notified arrangement with the country concerned.
    3. Core conditions: The offence must be punishable in both countries, and the person tried only for the offence for which surrender was granted.
    4. What decides the outcome: The foreign court applies its own domestic law and human rights obligations, not the requesting state’s assessment of the case.

    What is an Interpol Red Notice?

    1. About: A request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender or similar legal action.
    2. Its legal weight: It is not an international arrest warrant, and each country decides what force to give it under its own law.

    What is an Interpol Blue Notice?

    1. About: A request to collect additional information about a person’s identity, location or activities in relation to a criminal investigation.
    2. Why conversion matters: A Blue Notice does not support arrest, so it must be converted into a Red Notice before extradition action becomes possible.

    What is a provisional arrest request?

    1. About: An urgent request to a foreign state to arrest a located fugitive before the full extradition documentation is submitted.
    2. The time limit: It holds the person only for a fixed period, after which the formal extradition request must arrive or the person is released.

    What has the Home Ministry directed the States to do?

    1. Timely processing: States and Union Territories must ensure timely processing of extradition requests for fugitives abroad.
    2. Dossiers in advance: All States, Union Territories and law enforcement agencies must prepare extradition dossiers in advance in every case where an Interpol Red Notice has been issued.
    3. Why in advance: The prepared dossier allows a provisional arrest or extradition request to be sent immediately once a fugitive is located or arrested abroad.
    4. Prison upgrades: Central jails must develop prison facilities that meet international standards, and the status of such facilities has been sought from every State.
    5. Case review: All pending extradition matters must be reviewed, and cases unsuitable for extradition identified or proposed for withdrawal.
    6. Extradition cells: The review meeting discussed setting up extradition cells with sufficient staff and converting Interpol Blue Notices into Red Notices.

    Why do extradition requests fail on India’s own side?

    1. The observed pattern: Even after fugitives are traced or arrested abroad on the basis of Interpol notices, state police or investigating agencies delay sending provisional arrest or formal extradition requests to the ministry.
    2. Who owns the document: Preparing a legally sound extradition request is primarily the responsibility of the investigating agency or state police concerned.
    3. Consequence one, release: If the formal request does not arrive within the stipulated time, the fugitive may be released.
    4. Consequence two, lapse: The period of provisional arrest lapses, ending the legal basis for custody.
    5. Consequence three, flight: The person may flee that foreign jurisdiction, making tracing and arrest again extremely difficult.
    6. Why the deadline binds: Foreign authorities are bound by their own domestic laws and treaty obligations and cannot extend custody to accommodate Indian delay.

    Which agencies must coordinate for a single extradition?

    1. The investigating agency or state police: Builds the case file and drafts the legally sound request.
    2. The Central Bureau of Investigation: Routes the matter through Interpol, since it is India’s National Central Bureau.
    3. The Ministry of Home Affairs: Processes and forwards the request as the nodal ministry.
    4. The Ministry of External Affairs: Transmits the request through diplomatic channels.
    5. The Indian mission concerned: Pursues the request with the host government and its courts.
    6. The failure point: A chain of five actors means one slow link defeats the entire request, which is what the advisory targets.

    Why do prison conditions decide extradition outcomes abroad?

    1. The foreign test: Courts in requested states assess whether surrender would expose the person to treatment violating their own human rights obligations.
    2. What is examined: Cell space, overcrowding, medical care, protection from violence and access to legal remedies in the specific jail proposed.
    3. The Indian response so far: Assurances have been offered on a case by case basis, including video evidence of designated barracks.
    4. Why the directive follows: Requiring central jails to meet international standards converts a case by case assurance into a standing capability.
    5. The linked demand: The ministry has sought updated details on the status of internationally compliant prison facilities from every State.

    Why has a withdrawal review been ordered?

    1. Reluctance on certain cases: Some States and agencies have been reluctant to proceed with extradition in matrimonial disputes and other cases.
    2. Their reasoning: Such cases, in their assessment, may not meet the legal threshold of an extraditable offence.
    3. The reporting gap: Those decisions were not communicated to the ministry, leaving pending cases on the books without status.
    4. The correction: Cases unsuitable for extradition must now be identified or formally proposed for withdrawal, so effort concentrates on viable requests.

    Challenges to India’s Extradition Framework

    1. Delay at the origin of the request: The window created by a foreign arrest closes before the paperwork arrives. e.g. an expired provisional arrest period releases the fugitive with no fresh basis for custody.
    2. Prison conditions as a refusal ground: Foreign courts refuse surrender on human rights grounds relating to Indian jails. e.g. the United Kingdom High Court allowed an appeal against extradition in a tax and money laundering case in 2025 on prison conditions and treatment grounds.
    3. Precedent of outright refusal: A refusal on custodial treatment grounds can end a case permanently. e.g. Denmark declined to extradite the principal accused in the Purulia arms drop case, citing risk of ill treatment.
    4. Conditions attached to successful surrender: Assurances given to secure extradition bind Indian courts afterwards. e.g. the assurance given to Portugal limited the sentence in the case of a fugitive returned in 2005 to 25 years and excluded the death penalty.
    5. Absence of a treaty with key jurisdictions: Fugitives shelter in states where India has no extradition treaty, only an arrangement or none at all. e.g. requests to jurisdictions without treaty coverage depend entirely on reciprocity and domestic discretion.
    6. Capacity inside state police: Most state forces have no officer trained in drafting extradition documentation. e.g. the ministry has had to direct the creation of dedicated extradition cells with sufficient staff.
    7. Threshold misjudgement: Requests are pursued in cases foreign courts will not accept as extraditable. e.g. matrimonial dispute cases that States themselves assess as below the legal threshold.
    8. Notice type mismatch: A person is tracked on a notice that gives no power of arrest. e.g. Blue Notices pending conversion into Red Notices leave a located fugitive untouchable.

    Conclusion

    The advisory reframes extradition failure as a domestic sequencing problem, since the legal window opened by a foreign arrest is lost when the investigating agency’s dossier is not ready. India has brought back 274 fugitives from 36 countries since 2021, and the ministry now wants dossiers prepared the moment a Red Notice issues, dedicated extradition cells, and central jails built to international standards so that prison conditions stop functioning as a refusal ground. States must next report the status of compliant prison facilities and identify cases proposed for withdrawal from extradition proceedings.

  • Mines and Minerals Amendment Bill 2026 curbs State taxing powers over mineral rights

    Why in the News

    Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 on 13 August 2026, restricting the power of States to levy taxes on mineral rights and mineral bearing lands. The measure reverses in statute the fiscal gain that a nine judge Bench of the Supreme Court gave mineral rich States in 2024, and it has united ruling and opposition parties in Kerala, Odisha and Jharkhand against it.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. About: The Mines and Minerals (Development and Regulation) Act, 1957 is the central law regulating the grant of mineral concessions and the development of mines in India.
    2. The declaration it carries: Section 2 declares it expedient in the public interest that the Union take control of the regulation of mines and mineral development, which activates Entry 54 of the Union List.
    3. Royalty setting: Section 9 empowers the Central Government to fix and revise royalty rates, and revision is permitted not more than once every three years.
    4. Concession route: Since the 2015 amendment, mineral concessions are granted by States through competitive auction rather than by discretionary allotment.
    5. Local sharing: Section 9B requires a District Mineral Foundation in every district affected by mining, funded by a contribution linked to royalty.

    What is a royalty on minerals?

    1. Definition: Royalty is the payment a lessee makes to the owner of the mineral for the privilege of extracting and removing it, calculated on the quantity or value produced.
    2. Legal character: The Supreme Court has held royalty to be a contractual consideration flowing from the mining lease, not a tax levied by the state.

    What is a cess?

    1. Definition: A cess is a levy imposed for a specified purpose, with its proceeds earmarked for that purpose rather than merged into general revenue.
    2. Why it matters here: Mineral bearing States had imposed cesses on royalty and on mineral bearing land, and it is this class of levy that the amendment restricts.

    What is the District Mineral Foundation (DMF)?

    1. Definition: The District Mineral Foundation is a non profit trust established in every mining affected district to work for the benefit of persons and areas affected by mining.
    2. Funding: Lessees contribute a share of royalty to the Foundation, and the money is spent through the Pradhan Mantri Khanij Kshetra Kalyan Yojana on health, education, drinking water and livelihood in mining affected areas.

    What is the current status of State taxing power over mineral rights in India?

    1. Constitutional entry: Entry 50 of the State List gives States the power to tax mineral rights, expressly subject to any limitations imposed by Parliament by law relating to mineral development.
    2. Judicial position since 2024: A nine judge Bench held that royalty is not a tax and that States retain legislative competence to tax mineral rights and mineral bearing land.
    3. Retrospective effect: The Court permitted recovery of dues from 1 April 2005, to be paid in staggered instalments over twelve years beginning 1 April 2026, without interest or penalty for the earlier period.
    4. State levies in force: Mineral rich States including Odisha, Jharkhand and West Bengal had enacted or revived levies on mineral rights in reliance on that ruling.
    5. The new limitation: The 2026 amendment now exercises the limitation power in Entry 50 to restrict those levies and vests sole authority to frame rules in the Centre.
    6. Central levies unaffected: Royalty under Section 9, the District Mineral Foundation contribution and the National Mineral Exploration Trust contribution of 2 per cent of royalty continue to be fixed centrally.

    Constitutional Provisions Related to Mineral Rights and State Taxation

    1. Article 246: Distributes legislative power between Parliament and State legislatures through the three lists of the Seventh Schedule.
    2. Entry 54, Union List: Gives Parliament power over the regulation of mines and mineral development to the extent that such control is declared by law to be expedient in the public interest.
    3. Entry 23, State List: Gives States power over the regulation of mines and mineral development, expressly subject to Entry 54 of the Union List.
    4. Entry 18, State List: Places land, including rights in land and land tenures, within the exclusive competence of the States.
    5. Entry 49, State List: Gives States the power to tax lands and buildings, which covers mineral bearing land as a class of land.
    6. Entry 50, State List: Gives States the power to tax mineral rights, subject to limitations imposed by Parliament by law relating to mineral development.
    7. Article 265: Provides that no tax shall be levied or collected except by authority of law.
    8. Article 254: Governs repugnancy between a central and a State law on a concurrent subject, and gives the central law primacy.

    What does the 2026 amendment actually change?

    1. Restriction on State taxes: The Bill restricts the power of States to levy taxes on mineral rights and on mineral bearing lands.
    2. Restriction on cesses: The restriction extends to cesses and other levies imposed on the same subject matter.
    3. Rule making centralised: An amendment grants sole authority over the framing of rules to the Centre.
    4. The Centre’s stated purpose: The government has argued that the amendment will promote mineral production, ensure mineral security and create a more uniform regulatory framework.
    5. Passage: The Bill was cleared by the Rajya Sabha and passed by Parliament on 13 August 2026 amid Opposition protests.

    How did the 2024 nine judge ruling set up this legislative response?

    1. The question referred: Whether royalty under the 1957 Act is a tax, and whether States retain independent power to tax mineral rights and mineral bearing land.
    2. The holding: By a majority of eight to one the Court held that royalty is not a tax, and that State competence under Entry 50 survives.
    3. The precedent overruled: The 1990 ruling that had treated royalty as a tax, and had thereby denied States a separate taxing field, was overturned.
    4. The fiscal consequence: Mineral rich States became entitled to arrears accumulated since 2005, an amount running into more than a lakh crore rupees across States.
    5. The opening the Court left: The judgment expressly preserved Parliament’s power under Entry 50 to impose limitations on State taxation of mineral rights, and the 2026 amendment uses exactly that power.

    Why do mineral rich States say the Bill strips their revenue base?

    1. Encroachment on land: The Kerala Chief Minister described the legislation as a serious encroachment on the State’s constitutional powers over land and a grave threat to India’s federal structure, and said the State would mount political and, if necessary, legal opposition.
    2. Land is a State subject: The Leader of the Opposition in Kerala argued that land falls under Entry 18 of the State List and that taxation of land is also a State subject, so the restriction enters the States’ constitutional domain.
    3. Disproportionate impact: Odisha’s former Chief Minister wrote that the provisions would disproportionately impact mineral rich States and cause massive revenue losses that would stifle the State’s developmental agenda.
    4. What the revenue funds: He stated that mining revenue finances healthcare, education, welfare schemes and infrastructure development across the State, and demanded a special Assembly session and a unanimous resolution.
    5. Fiscal autonomy claim: He described fiscal autonomy as a constitutional principle built into the federal system, and said stripping States of the power to tax their own mineral bearing lands strikes at cooperative federalism.
    6. Protest in Jharkhand: The Jharkhand Chief Minister called it a black Bill and warned of protests in every district, block, panchayat and town of the State.
    7. The privatisation charge: The Kerala Opposition alleged that the larger objective was to weaken the public sector and create opportunities for corporates to earn windfall profits.

    How was the Bill carried through Parliament?

    1. Passage amid protest: The Bill was passed while the Opposition was protesting, and the concerns raised about federalism were not addressed on the floor.
    2. Rights of affected people: The legislation overlooks the rights of those living on resource rich land, who are the first to bear the cost of expanded extraction.
    3. A pattern, not an exception: The amendment follows an established pattern of hurried lawmaking and continuing expansion of central powers at the cost of States and local communities.
    4. Session context: The monsoon session that began on 20 July 2026 passed several Bills with inadequate deliberation.
    5. What deliberation would have required: An all party meeting, circulation of the draft and consultation with State Chief Ministers were available and were not used.

    Can a Bill be constitutionally valid and still weaken federalism?

    1. The text supports the Centre: Entry 50 has always made State taxation of mineral rights subject to limitations imposed by Parliament, so the amendment uses a power the Constitution itself confers.
    2. The Court anticipated it: The 2024 judgment recognised that parliamentary limitation was available, so the amendment is a legislative answer within the space the ruling left open.
    3. The effect side: A limitation that removes the entire field converts a qualified State power into no power at all, which is a different thing from regulating its exercise.
    4. Who bears the loss: The States that lose most are the poorest resource States, whose own tax base is narrow and whose transfers do not compensate for mineral revenue.
    5. The federal principle at stake: Fiscal autonomy is not merely a revenue question, because a State that cannot tax its own resource base cannot plan expenditure independently of central transfers.
    6. The objection is not uniformly principled: The Kerala Opposition itself pointed out that the State government’s Revised Budget and White Paper on State finances proposed full privatisation of beach sand mining, which is the same direction it attacks in the Centre.

    Major Debates Surrounding Mineral Taxation and Federalism

    1. Royalty as tax or consideration: The 1990 ruling treated royalty as a tax, the 2004 five judge ruling read that as a drafting error, and the 2024 nine judge ruling settled it as a contractual consideration.
    2. How far a limitation may go: Whether Parliament’s power to impose limitations under Entry 50 extends to extinguishing the State’s taxing field altogether remains contested.
    3. Retrospective recovery burden: The staggered recovery of arrears from 2005 falls heavily on public sector miners and steel producers, and industry has argued it will be passed into input costs.
    4. Uniformity against autonomy: The Centre’s case for a single national regulatory framework for mineral security runs directly against the States’ claim to price their own resource endowment.
    5. Resource curse: Mineral rich States record among the highest poverty rates despite the highest extraction, which raises whether royalty and District Mineral Foundation flows compensate the host population at all.
    6. Community consent: The rights of Scheduled Area residents under the Fifth Schedule and the 1996 Panchayats Extension to Scheduled Areas Act sit uneasily with a centralised concession regime, as the Samatha and Niyamgiri rulings demonstrated.
    7. District Mineral Foundation utilisation: Large unspent balances and expenditure outside mining affected areas have raised the question whether local sharing works in practice.

    Challenges to the Mineral Taxation Framework after the Amendment

    1. Revenue substitution gap: No mechanism replaces the levies the States lose, e.g. Odisha’s mining revenue funds a large share of its own tax receipts and no equivalent central transfer has been announced.
    2. Litigation risk: The amendment invites a fresh constitutional challenge, e.g. the Kerala Chief Minister has already said the State will consider legal opposition to the Act.
    3. Investment uncertainty: Repeated changes to the fiscal regime deter long lead mining investment, e.g. bidders in mineral auctions price in future levy changes through lower premium bids.
    4. Local community exclusion: Centralised rule making distances the decision from those displaced, e.g. Niyamgiri in Odisha showed that consent of gram sabhas can defeat a project cleared at higher levels.
    5. Auction premium distortion: High auction premiums already compress operating margins, e.g. several iron ore blocks won at premiums above 100 per cent of sale value have remained unoperated.
    6. Enforcement of illegal mining controls: Restricting State fiscal powers does not address extraction outside the legal framework, e.g. illegal sand and iron ore mining continues to be reported across multiple States despite the auction regime.
    7. Environmental cost transfer: The framework does not price ecological damage into the concession, e.g. mining in the Aravallis and in central Indian forest belts has continued alongside contested clearances.

    Conclusion

    Entry 50 always made State taxation of mineral rights subject to limitation by Parliament, so the amendment uses a power the Constitution grants. Its effect is to reverse in statute the fiscal gain that a nine judge Bench gave mineral rich States in 2024. What remains unresolved is whether a formally valid limitation that removes an entire revenue base is compatible with fiscal federalism, and that question is now headed back to the courts.

    What is Fiscal Federalism?

    1. About: Fiscal federalism is the division of taxation powers, expenditure responsibilities and transfer mechanisms between the Union and the States in a federal system.
    2. Rationale: Revenue raising capacity is concentrated at the centre while service delivery responsibility sits with the States, so a transfer system is required to close the gap.
    3. Vertical fiscal imbalance: The mismatch between the Union’s revenue powers and the States’ expenditure responsibilities, corrected through tax devolution.
    4. Horizontal fiscal imbalance: The mismatch between States of differing income and need, corrected through the Finance Commission’s inter se distribution formula.
    5. Third tier imbalance: The mismatch at the level of panchayats and municipalities, whose own revenue is minimal and whose transfers depend on State Finance Commissions.

    Key Concerns Regarding Fiscal Federalism

    1. Shrinking divisible pool: Cesses and surcharges are not shared with States, so a growing share of central revenue sits outside the devolution formula.
    2. Loss of taxation autonomy under GST: States surrendered most of their independent indirect taxing power, leaving mineral rights and land among the few residual fields.
    3. Conditional transfers: Centrally sponsored schemes come with matching share and design conditions that constrain State expenditure choices.
    4. Weak third tier finance: Local bodies remain dependent on State transfers because property tax and user charge collection is under exploited.
    5. Borrowing limits: State borrowing under Article 293 requires central consent where the State is indebted to the Union, which constrains counter cyclical spending.

    Constitutional Framework Governing Mineral Rights and State Taxation

    1. Article 246: Distributes legislative competence between the Union and the States through the Seventh Schedule.
    2. Seventh Schedule: Contains the Union List, the State List and the Concurrent List that operationalise Article 246.
    3. Entry 54, Union List: Regulation of mines and mineral development to the extent declared by Parliament by law to be expedient in the public interest.
    4. Entry 23, State List: Regulation of mines and mineral development, subject to Entry 54 of the Union List.
    5. Entry 18, State List: Land, rights in land, land tenures and the relation of landlord and tenant.
    6. Entry 49, State List: Taxes on lands and buildings.
    7. Entry 50, State List: Taxes on mineral rights, subject to any limitations imposed by Parliament by law relating to mineral development.
    8. Article 265: No tax shall be levied or collected except by authority of law.
    9. The Mineral Area Development Authority line of cases: India Cement in 1990 treated royalty as a tax, Kesoram Industries in 2004 read that as a drafting error, and Mineral Area Development Authority in 2024 held by eight to one that royalty is not a tax and that Entry 50 competence survives.

    Laws and Rules Governing Mining in India

    1. Mines and Minerals (Development and Regulation) Act, 1957: The parent statute for mineral concessions; its Section 2 declaration is what brings mineral regulation under Union control.
    2. MMDR Amendment Act, 2015: Introduced auction as the only route for granting mineral concessions and created the District Mineral Foundation and the National Mineral Exploration Trust.
    3. MMDR Amendment Act, 2021: Removed the distinction between captive and merchant mines and allowed transfer of statutory clearances with the lease.
    4. MMDR Amendment Act, 2023: Created the exploration licence and moved twelve critical and deep seated minerals, including lithium and beryllium, to central auction under a new Part D.
    5. Mines Act, 1952: Governs worker safety, working hours and welfare in mines, enforced through the Directorate General of Mines Safety.
    6. Offshore Areas Mineral (Development and Regulation) Act, 2002: Governs mineral rights in territorial waters and the exclusive economic zone, amended in 2023 to introduce auctions.
    7. Mineral Conservation and Development Rules, 2017: Prescribe scientific mining, mine closure and conservation obligations for lessees.
    8. Forest (Conservation) Act, 1980 and Forest Rights Act, 2006: Govern diversion of forest land and require settlement of individual and community forest rights before diversion.
    9. Panchayats (Extension to Scheduled Areas) Act, 1996 (PESA): Requires consultation with the gram sabha before granting a mineral concession in a Scheduled Area.

    Back2Basics: Mineral Area Development Authority v. Steel Authority of India (2024)

    1. Bench strength: It was decided by a nine judge Constitution Bench of the Supreme Court, the largest bench to sit on the question.
    2. Majority: The ruling was by a majority of eight to one.
    3. Core holding: Royalty payable under Section 9 of the 1957 Act is a contractual consideration and not a tax.
    4. Competence upheld: States retain legislative competence under Entry 50 of the State List to tax mineral rights, and under Entry 49 to tax mineral bearing land.
    5. Precedent overruled: It overruled India Cement Limited v. State of Tamil Nadu (1990), which had treated royalty as a tax.
    6. Limitation preserved: The Court recorded that Parliament may impose limitations on the Entry 50 power through a law relating to mineral development.
    7. Prospectivity ruling: In a separate order the Court allowed recovery of dues from 1 April 2005 in instalments over twelve years starting 1 April 2026, and waived interest and penalty for the period before the judgment.

    Government Initiatives for the Mineral Sector

    1. National Mineral Policy, 2019: Sets the policy framework for sustainable mining, exploration expansion and a right of first refusal in auctions for existing lessees.
    2. National Critical Mineral Mission: Launched to secure supply of critical minerals, targeting 1,200 domestic exploration projects by 2030 to 2031, production of 15 critical minerals and acquisition of 50 overseas assets.
    3. Khanij Bidesh India Limited (KABIL): A joint venture of three public sector undertakings to acquire mineral assets abroad, including lithium acreage in Argentina.
    4. Pradhan Mantri Khanij Kshetra Kalyan Yojana: Spends District Mineral Foundation funds on drinking water, health, education, sanitation and livelihoods in mining affected areas.
    5. National Mineral Exploration Trust: Funded by a levy of 2 per cent of royalty, it finances regional and detailed exploration by notified agencies.
    6. Mining Tenement System and Star Rating of Mines: Digitise concession records and grade operating mines on sustainable development performance.

    Key Facts about India’s Mineral Sector

    1. Production base: India produces 95 minerals, comprising fuel, metallic, non metallic, atomic and minor mineral categories.
    2. Global standing: India is the world’s second largest producer of coal and among the largest producers of iron ore and crude steel.
    3. Leading States: Odisha, Chhattisgarh, Jharkhand, Karnataka and Rajasthan account for the bulk of the value of mineral production.
    4. Critical minerals list: India notified a list of 30 critical minerals in 2023, of which twelve were moved to central auction under the 2023 amendment.
    5. Foundation contribution: Lessees contribute 10 per cent of royalty to the District Mineral Foundation for auctioned leases and 30 per cent for older leases.
    6. Sector share: Mining and quarrying contribute roughly 2 to 3 per cent of gross value added, well below the share in comparable resource economies.

    Challenges in India’s Mining Sector

    1. Exploration deficit: Only a small fraction of the obvious geological potential area has been explored in detail, e.g. India still imports the bulk of its lithium, cobalt and rare earth requirement despite favourable geology.
    2. Land and forest clearance delays: Concession holders wait years for statutory clearances, e.g. blocks auctioned in central India have remained unoperated pending forest diversion approval.
    3. Displacement and rehabilitation: Mining displaces tribal populations without durable resettlement, e.g. the Niyamgiri hills case turned on the Dongria Kondh community’s rights over the proposed bauxite site.
    4. Illegal mining: Extraction outside the legal framework persists in high value and low value minerals alike, e.g. river sand mining continues to be reported across States despite auction and monitoring rules.
    5. Environmental damage: Overburden, dust and water table impact are inadequately priced, e.g. coal mining in the Singrauli belt has produced sustained air and water contamination.
    6. Occupational safety: Accident rates in mines remain high, e.g. rat hole coal mining in Meghalaya has caused repeated fatal flooding incidents despite prohibition.
    7. Value addition gap: India exports ore and imports processed metal, e.g. iron ore fines have historically been exported while high grade steel inputs are imported.

    Way Forward

    1. Compensate the fiscal loss: Route a defined share of central mineral levies back to producing States to replace the revenue the amendment removes.
    2. Legislate the limitation narrowly: Define the scope of the Entry 50 limitation in the statute so that the residual State field is stated rather than left to litigation.
    3. Institutionalise consultation: Refer contested federal legislation to a Joint Parliamentary Committee and consult State Chief Ministers before introduction.
    4. Strengthen local sharing: Audit District Mineral Foundation spending and restrict it to a defined radius around mining affected habitations.
    5. Expand exploration: Use the exploration licence route to bring private and junior exploration capital into deep seated and critical mineral search.
    6. Build processing capacity: Support domestic refining and separation of critical minerals so that concession reform translates into value addition rather than ore export.

    Matching Previous Year Question

    “[2025, GS2, 15 marks] Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India?”

  • Parliament curbs states’ power to tax minerals

    Why in the News

    Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026. It bars states from imposing specified levies on mineral rights except on terms set by the Centre, reopening a fiscal federalism dispute.

    What does the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 do?

    1. Levy restriction: States cannot impose specified taxes on mineral rights or mineral-bearing land except as the Centre prescribes.
    2. Dues extinguished: Pre-amendment dues estimated near 2 lakh crore rupees stand extinguished.
    3. Scope: The Bill applies to major minerals such as iron ore, coal, bauxite, manganese, and copper.

    Why is this a fiscal federalism flashpoint?

    1. 2024 ruling reversed in effect: The Supreme Court in 2024 upheld states’ power to tax mineral rights, which the Bill now constrains.
    2. Revenue dependence: Mining was 84.9% of Jharkhand’s non-tax revenue in 2024-25.
    3. Mineral-rich states hit: States holding large mineral reserves lose an expected revenue stream.

    What is the Centre’s justification?

    1. Uniform rates: The government argues uniform mineral rates prevent a patchwork of state levies.
    2. No revenue loss claim: The Centre states that states retain powers over minor minerals.
    3. Investment climate: Predictable levies are framed as protecting mining-sector investment.

    What are the major debates surrounding it?

    1. Tax versus royalty: The dispute turns on whether a levy on minerals is a tax or a royalty, which the 2024 ruling addressed.
    2. Tribal concerns: Mineral belts overlap with Scheduled Areas, raising questions of local benefit-sharing.
    3. Divisible resource control: Centralising mineral levies shifts fiscal power toward the Union.

    Conclusion

    The amendment centralises control over mineral taxation soon after the Supreme Court affirmed states’ taxing power. The immediate stage is enactment, with a likely constitutional challenge the next development.

    Back2Basics

    Constitutional Framework Governing mineral taxation

    1. Entry 50, State List: Taxes on mineral rights, subject to Parliament’s limitations relating to mineral development.
    2. Entry 54, Union List: Regulation of mines and mineral development declared expedient in public interest.
    3. Article 246: Distributes legislative power between Union and states via the Seventh Schedule.

    What did the Supreme Court hold in 2024?

    The Mineral Area Development Authority v. SAIL judgment is the constitutional backdrop to the 2026 amendment. The 9-judge Constitution Bench, by 8:1 majority, held that royalty is not a tax and that States have legislative competence to tax mineral rights under Entry 50, State List. It also recognised the States’ power to tax mineral-bearing land under Entry 49, State List.

    • Royalty ≠ Tax: Royalty paid under the MMDR Act is consideration for the right to extract minerals and is distinct from a tax.
    • State Taxing Power: States can impose taxes on mineral rights under Entry 50, List II, subject to limitations imposed by Parliament.
    • Mineral-Bearing Land: States can also levy taxes on land under Entry 49, List II.
    • MMDR Limitation: The Court held that the MMDR Act, as it then stood, did not impose a limitation on the States’ taxing power.

    Why is the 2026 Amendment significant?

    The 2026 amendment seeks to alter this position prospectively by restricting State taxation of mineral rights and mineral-bearing lands, except in accordance with conditions or restrictions prescribed by the Centre

    PYQ Relevance

    [UPSC 2025] Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India?

    Linkage: The 2025 PYQ examines the evolution of Centre–State financial relations and their impact on fiscal federalism. The Bill raises fresh concerns over the Union’s role in restricting States’ mineral revenue powers and fiscal autonomy.

  • Lok Sabha passes Mines and Minerals Amendment Bill, 2026; bars States from taxing mineral rights

    Why in the news?

    The Lok Sabha passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 without debate, barring State governments from imposing additional taxes, cesses or levies on mineral rights and giving the Centre greater control over regulating mineral-laden lands. The move exposes a fiscal federalism clash, since it curtails a State taxation power the Supreme Court had upheld in 2024 and shifts fiscal authority over a Concurrent-domain resource toward the Union.

    What does the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 do?

    1. Bars State levies: It prevents State governments from imposing additional taxes, cesses or levies on mineral rights.
    2. Central control: It gives the Centre greater control over regulating mineral-laden lands.
    3. Stated rationale: The Coal and Mines Minister argued that divergent fiscal levies by States had created uncertainty in the mineral sector.
    4. Feared effects cited: The government said such divergence could raise costs, encourage imports and undermine domestic supply chains.

    What is the Mines and Minerals (Development and Regulation) Act, 1957?

    1. Purpose: The MMDR Act, 1957 is the principal law regulating the mining sector, governing the grant of mineral concessions, leases and the development and regulation of mines.
    2. Federal scheme: It empowers the Centre to frame rules for major minerals, while States frame rules for minor minerals and grant concessions for minerals in their territory.

    Current Status of State taxation power over minerals in India

    1. State entitlement: States levy royalty on extracted minerals and, since a 2024 Supreme Court ruling, hold constitutional competence to tax mineral rights and mineral-bearing lands.
    2. The 2024 judgment: A nine-judge Bench held that royalty is not a tax and that States have legislative power to tax mineral rights, a power the present Bill now seeks to restrict.
    3. Revenue stakes: Mineral-rich States such as Jharkhand, Odisha and Chhattisgarh rely on mining royalties and cesses as a significant own-revenue source.

    Constitutional Provisions related to mineral regulation and fiscal federalism

    1. Entry 54, Union List: Regulation of mines and mineral development to the extent Parliament declares expedient in the public interest.
    2. Entry 23, State List: Regulation of mines and mineral development subject to the Union List entry.
    3. Entry 50, State List: Taxes on mineral rights subject to any limitations imposed by Parliament relating to mineral development.
    4. Entry 49, State List: Taxes on lands and buildings, the basis on which States tax mineral-bearing land.
    5. Article 246 and Seventh Schedule: Distribute legislative competence between the Union and the States across the three Lists.
    6. Article 265: No tax shall be levied or collected except by authority of law.

    Why does the Centre want to bar State levies?

    1. Uniformity: A single fiscal regime is intended to remove the uncertainty created by State-by-State levies.
    2. Cost competitiveness: The government links divergent levies to higher input costs for downstream industry and greater import dependence.
    3. Supply chain security: Uniform charges are framed as protection for domestic mineral supply chains, including critical minerals.

    Why do States and the Opposition see this as an assault on federalism?

    1. Overriding the Court: The Bill legislatively narrows a taxation power the Supreme Court affirmed for States in 2024.
    2. Erosion of own-revenue: Barring cesses and levies removes a fiscal lever that mineral-rich States use to fund local development.
    3. Centralising trend: Critics place it within a wider pattern of the Union tightening control over resources located in State territories.
    4. Process objection: The Bill was passed without debate amid protests, which the Opposition cited as a denial of scrutiny on a federalism-sensitive measure.

    Major debates surrounding mineral taxation federalism

    1. Royalty versus tax: Whether royalty is a tax and where the line lies between Union regulation of mineral development and State taxation of mineral rights.
    2. Parliamentary limitation: How far Parliament’s power under Entry 50 to limit State mineral taxation can extend before it hollows out the State entry.
    3. Distributive justice: Whether mineral-bearing States should retain fiscal upside from resources extracted within their borders.
    4. Investment climate: Whether uniform central levies genuinely lower costs or merely redistribute fiscal space from States to industry.

    Challenges to a centralised mineral fiscal regime

    1. Vertical fiscal imbalance: Reduced own-revenue deepens State dependence on central transfers.
    2. Litigation risk: A statutory override of a constitutional ruling invites fresh challenges before the Supreme Court.
    3. Regional equity: Resource-rich but income-poor States lose a development financing tool.
    4. Cooperative federalism strain: Bypassing State consent on a shared-domain subject weakens negotiated federalism.
    5. Compliance uncertainty: Transition from varied State levies to a single regime creates short-term ambiguity for operators.

    Conclusion

    The Lok Sabha has cleared a Bill that removes the States’ power to levy additional taxes on mineral rights and centralises regulatory control over mineral lands. The current status is passage in the Lower House amid Opposition protest; the next milestone is its consideration in the Rajya Sabha and likely constitutional scrutiny given its tension with the 2024 Supreme Court ruling on State taxation of minerals.

    What is Fiscal Federalism? (Foundational Context)

    1. About: Fiscal federalism is the division of taxation powers, expenditure responsibilities and transfers between the Union and the States.
    2. Rationale: It exists to match revenue-raising capacity with spending needs across tiers of government.
    3. Named typology: It addresses vertical imbalance between the Union and States, horizontal imbalance across States, and weak third-tier finances at the local level.

    Key Concerns Regarding Fiscal Federalism

    1. Shrinking divisible pool: Rising cesses and surcharges reduce the shareable tax pool with States.
    2. Eroded State autonomy: GST and central levies have narrowed independent State taxation.
    3. Resource control: Central assertion over minerals and land in State territories limits State fiscal levers.
    4. Weak local finances: Third-tier bodies remain underfunded and dependent.

    Constitutional Framework Governing Mineral Regulation

    1. Entry 54 (List I): Union regulation of mines and mineral development in the public interest.
    2. Entry 23 (List II): State regulation of mines subject to the Union entry.
    3. Entry 50 (List II): State taxes on mineral rights subject to parliamentary limitation.
    4. Article 246: Allocation of legislative competence across the three Lists.
    5. Article 265: Taxation only by authority of law.

    Way Forward

    1. Consultative design: Frame mineral fiscal policy through the GST Council model of negotiated federalism.
    2. Revenue neutrality: Compensate mineral-rich States for lost cesses through predictable transfers.
    3. Legal clarity: Reconcile the amendment with the 2024 ruling to avoid protracted litigation.
    4. District mineral funds: Strengthen use of mining revenues for affected local communities.

    “[2025] Consider the following statements:

    Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories.

    Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement I and Statement II are correct and Statement II explains Statement I

    (b) Both Statement I and Statement II are correct but Statement II does not explain Statement I

    (c) Statement I is correct but Statement II is incorrect

    (d) Statement I is incorrect but Statement II is correct

  • [5th August 2026] The Hindu OpED: Jammu and Kashmir: the elusive quest for Statehood

    PYQ Relevance
    [UPSC 2016]     To what extent is Article 370 temporary? Discuss future prospects.
    Linkage: The PYQ directly tests the constitutional character of Article 370 that this article’s central event revolves around. Now after its abrogation the theme extends to statehood demand of J&K.

    Mentor’s Comment

    August 5, 2026, marks seven years since Jammu and Kashmir’s special status under Article 370 was revoked; August 9 will mark seven years since it lost Statehood. Seven years on, the promised trade-off of temporary central control for security and economic growth remains unfulfilled, even as the Lieutenant-Governor’s unaccountable powers have expanded further.

    Has the trade-off of temporary central control for security and economic growth delivered its promised outcomes?

    1. No formal emergency, emergency-scale measures: The 2019 actions were accompanied by troop deployment, detention of over 5,000 political leaders and cadre, curfew, and a communications blockade, without any emergency being formally declared.
    2. Violence has spread, not receded: Terrorist attacks continued in 2025 at Pahalgam in April and Delhi’s Red Fort in November, and violence spread to previously dormant areas such as Poonch-Rajouri and adjoining districts.
    3. Economic convergence has reversed: J&K’s per capita income as a share of the national average fell from 79.9% in 2013-14 to 76.6%, per the J&K Economic Survey 2025-26, a decline of 3.3 percentage points.
    4. Unemployment remains structurally high: Overall unemployment is close to twice the national average; graduate unemployment stands at 23.9%.
    5. Peaceful response met with intensified control: Kashmiris responded to the Pahalgam attack with peace marches and candlelit demonstrations, but the Union Home Ministry responded with the most militarised Amarnath Yatra in J&K’s history, routine PSA and UAPA charges, summons to over 2,000 people after a single incident, near-continuous curfews, and the highest number of internet shutdowns of any region in the country since 2019.

    What made the process of revoking Article 370 and Statehood constitutionally unprecedented?

    1. Executive fiat over Article 370: Article 370 was hollowed out through executive action; the Governor later stated he was directed by the Union Home Minister to sign.
    2. Legislative fiat over Statehood: Statehood was removed through Parliament without consulting J&K’s people or its elected political leadership.
    3. First such downgrade since 1956: J&K became the first State since Delhi in 1956 to lose Statehood.
    4. Basic structure implications: Together, the two actions represent a departure from constitutional principles and the basic structure of the Union.
    5. Treated as an exception, not a precedent: The actions were framed as specific to a conflict-ridden J&K rather than examined as part of a broader strain on India’s constitutional democracy.

    Why have judicial and administrative checks failed to restore accountable government in J&K?

    1. Prolonged judicial deference: The Supreme Court allowed the Union’s security-justification argument to stand unchallenged for four years before weakly recommending that Statehood be restored “as soon as possible.”
    2. No timeline since: Three years after that recommendation, the Court has not heard petitions seeking a definite restoration timeline.
    3. No test of necessity: At no point has the Court examined the Union’s measures against constitutional or pragmatic standards of necessity.
    4. Six-month limit bypassed: The Constitution caps emergency conditions at six months, yet J&K has remained under emergency-like conditions for seven years without formal invocation.
    5. Lieutenant-Governor holds core powers: Under the 2024 Transaction of Business Rules, the Lieutenant-Governor, an appointee, controls the administration, police, and government prosecutors, despite J&K having had an elected government since 2024.
    6. Powers still expanding: The Lieutenant-Governor has since been granted emergency powers over telecommunications.
    7. High Court strictures without reform: The J&K High Court has repeatedly criticised the police’s misuse of draconian laws, without this leading to institutional reform.

    Why is the security-driven justification for prolonged unaccountable rule fundamentally flawed?

    1. Moral flaw: The claim that subjugation is a means to a desirable end conceals the fact that subjugation is a repugnant end in itself, never a legitimate means.
    2. Pragmatic flaw: Subjugation breeds disaffection, which expresses itself as violence once peaceful means of expression are disallowed, a pattern India has already experienced under colonial rule.
    3. Empirical failure confirms the flaw: The continued rise and spread of violence, alongside declining economic indicators, demonstrates that the justification has failed on its own practical terms.
    4. Judicial non-scrutiny entrenches the flaw: The absence of any judicial test of the argument’s utility has allowed it to function as a durable substitute for accountable governance rather than a genuinely temporary emergency measure.

    What would it take for J&K to move from unaccountable control to democratic accountability?

    1. Constitutional design points to elected government: The Constitution recognises an elected administration as the only structure capable of delivering accountability.
    2. Downstream institutions depend on it: An independent legislature, institutional oversight, autonomous bodies, and a free media all require an elected administration to develop.
    3. Civil society space is conditional: Civil society gains room to push for reform under an elected administration that it lacks under an appointed one.
    4. Renewed political campaign: J&K’s National Conference has renewed the campaign for Statehood restoration, earlier pursued only fitfully by the Congress, now framed explicitly around accountability.
    5. A record of “ugly firsts”: J&K has been the first State to see wide use of semi-lethal pellet guns (2016), the first to lose special status and Statehood (2019), and the first to undergo a communal delimitation altering Jammu’s demography through additional Hindu-majority constituencies (2022).
    6. A possible “positive first”: The 2024 State election produced a majority for the pluralist National Conference-Congress alliance despite the delimitation exercise, showing that engineered political outcomes can be overcome through the ballot; Statehood restoration would be a fitting next “first.”

    Conclusion

    Seven years of Central rule in Jammu and Kashmir have not delivered the promised improvements in security or economic development. Instead, power has become concentrated in the Lieutenant Governor, reducing the role of the elected government. The argument that prolonged Central control is necessary for security is flawed because it weakens democratic accountability and can increase public alienation. Restoring Statehood remains the constitutional path to accountable governance, but it requires timely political and judicial action rather than indefinite delay.