BJD stages protest over Mines and Minerals Amendment Act

Why in the News

The Biju Janata Dal has demanded constitutional intervention to reverse the Mines and Minerals (Development and Regulation) Amendment Act, 2026, marching to the Lok Bhavan in Bhubaneswar and submitting a memorandum addressed to the President through the Governor. The demand answers the Supreme Court’s judgment in Mineral Area Development Authority v. Steel Authority of India (2024). That judgment recognised the power of State governments to impose taxes and levies on mines and mineral bearing lands. It also dealt with recovery of such dues for the period beginning 1 April 2005, which the party values at more than Rs 1 lakh crore in arrears for Odisha alone. The contest is between Parliament’s power to limit State taxation in the name of mineral development and a State’s claim on the revenue from minerals it owns.

What has the party actually asked for?

1. Reversal, not amendment: The memorandum seeks constitutional intervention for the reversal of the 2026 amendment rather than a modification of its terms.
2. The route chosen: The petition was addressed to the President and routed through the Governor, placing the objection outside the legislative process the amendment has already cleared.
3. The stated test: Any legislative measure that substantially curtails the rights and financial interests of a State in relation to mines and mineral bearing lands deserves careful constitutional and legal examination.

What is at stake for Odisha’s revenue?

1. The arrears claim: The State was estimated to become entitled to more than Rs 1 lakh crore towards arrears of mining related taxes and levies following the 2024 judgment.
2. The recurring claim: A further approximately Rs 12,000 crore of additional annual revenue was estimated to follow from the recognised taxing power.
3. Why the base is large: Odisha’s reserves of iron ore, coal, bauxite, chromite and other minerals have historically been a major source of revenue for the State government, so a change in the taxing head moves a large absolute sum.

How does the amendment reverse the judgment’s effect?

1. The provision used: A new Section 9D bars a State from imposing any tax, cess or other levy on mineral rights or mineral bearing lands, whether measured by quantity, value or royalty, except in accordance with conditions the Central Government prescribes.
2. The constitutional hook: Entry 50 of the State List gives States the power to tax mineral rights subject to any limitations imposed by Parliament by law relating to mineral development, and this is the first exercise of that limitation.
3. The stated justification: Some States had stacked around fourteen separate charges, with land taxes reaching 20 per cent, on the ground that blocks were being made commercially unviable.
4. The disputed edge: The judgment recognised a separate State power to tax lands under Entry 49 of the State List, which Entry 50’s limitation clause does not reach, and that gap is what a challenge would target.

Challenges to the Mines and Minerals (Development and Regulation) Amendment Act, 2026

1. A statutory limit on a constitutional head: Curbing a State land tax through a central mining statute rather than a constitutional amendment leaves the reversal open to challenge on the ground that Parliament used a power it does not hold over Entry 49. Eg. Odisha and Jharkhand have both said they will test the amendment in the Supreme Court.
   The Fix: Settle the boundary between Entry 49 and Entry 50 by a reference under Article 143 before assessments under the new section are raised, rather than after a decade of recovery litigation.
2. A recognised entitlement is extinguished after it accrued: The 2024 judgment allowed recovery from 1 April 2005, so States had already booked receivables that the amendment removes prospectively and retrospectively at once. Eg. Odisha’s estimated arrears rest entirely on that recovery window.
   The Fix: Protect dues that accrued before the amendment’s commencement by an express saving clause, so the limitation operates only on future levies.
3. Mineral revenue is concentrated in a few States: A uniform national bar falls almost entirely on the small group of mineral bearing States, which cannot substitute the lost head from any other source. Eg. Odisha, Jharkhand and Chhattisgarh carry the bulk of India’s iron ore, coal and bauxite output and therefore the bulk of the foregone levy.
   The Fix: Compensate the affected States from a share of central mining receipts for a fixed transition period, on the model used for the Goods and Services Tax transition.
4. Input cost stability is bought with fiscal centralisation: Capping State levies stabilises costs for steel, aluminium, cement and power at the price of removing a State’s only mineral specific tax head. Eg. The uneven and rising input cost that followed the 2024 judgment is the stated reason for the amendment.
   The Fix: Prescribe a ceiling rate for State levies under Section 9D rather than a bar, so cost predictability is achieved without extinguishing the head.

Conclusion

The dispute has moved from the courtroom to the constitutional offices and is heading back to the courtroom. A State whose taxing power was recognised by a judgment has been overridden by an ordinary central statute, and the party in opposition in that State has taken the objection to the President rather than to Parliament, where the amendment has already passed. What to watch is whether the mineral bearing States file the challenge they have threatened, and whether it is framed on Entry 49 rather than Entry 50.

Back2Basics: The Mines and Minerals (Development and Regulation) Act, 1957

1. Scope: It is the parent law for every mineral except petroleum and natural gas, and it sets who may explore, who may mine and what they pay.
2. Ownership and leasing: The State government owns the mineral in its territory and signs every lease, even for a block the Centre has auctioned.
3. Auction as the only route: The MMDR Amendment Act, 2015 made competitive auction the sole route to a mineral concession, replacing discretionary first come first served allocation.
4. The 2023 shift: For 24 critical and strategic minerals the Centre took over the auction itself, moving the auctioning authority upward while leaving State ownership untouched.

Matching Previous Year Question

“[2025] Consider the following statements: I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals. Which of the statements given above are correct? (a) I and II only (b) II and III only (c) I and III only (d) I, II and III ANSWER: (c)”