India's MMDR Amendment Bill restricts state mineral taxes

The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, has passed both houses of the Indian Parliament and now awaits presidential assent. The legislation seeks to bring mineral-bearing land under Union control and prohibits states from imposing taxes, cesses, or levies on mineral rights or land based on quantity, value, or royalty, except under conditions prescribed by the Centre.

A critical provision of the amendment is the retrospective invalidation of unpaid or unrecovered state mining dues arising from earlier levies. While money already collected will not be refunded, the bill effectively extinguishes outstanding arrears. This move significantly impacts the financial implications of a July 2024 Supreme Court ruling, which had affirmed that states possess the power to tax mineral rights and land.

Odisha faces substantial financial risk, with potential claims exceeding Rs 1 lakh crore at stake. Nationally, estimates suggest unpaid arrears across various states could range between Rs 1.5 lakh crore and Rs 2 lakh crore. Additionally, while District Mineral Foundation (DMF) collections have reached ₹1.31 lakh crore, reports indicate that only approximately 53% of these funds have been spent, highlighting a gap between revenue collection and project execution.