Odisha: BJD plans legal action, public demonstrations against Mines and Minerals (Amendment) Bill
State-level opposition has emerged in Odisha against the recently passed Mines and Minerals (Development and Regulation) Amendment Bill, 2026, with plans for legal action and public demonstrations.
The opposition centres on provisions that restrict states' powers to levy taxes, cess, and other charges on mineral rights and mineral-bearing land.
Concerns raised include a significant loss of revenue for mineral-rich states, which use such levies to fund healthcare, education, and infrastructure spending.
The amendment reportedly also seeks to invalidate certain state-imposed levies from before the amendment's commencement that had not yet been collected or deposited.
The Bill has been passed by Parliament and requires presidential assent to become law.
The 2024 Supreme Court Ruling on Mineral Taxation (MADA Case)
In Mineral Area Development Authority & Anr. v. M/s Steel Authority of India & Anr. (25 July 2024), a nine-judge Constitution Bench of the Supreme Court, by an 8:1 majority, held that royalty paid under the Mines and Minerals (Development and Regulation) Act, 1957 is a contractual payment and not a "tax." It further held that states have the constitutional power to tax mineral rights and mineral-bearing land under Entries 49 and 50 of the State List, and that this power is not curtailed merely because Parliament has imposed royalty under the MMDR Act.
Key Details
- Entry 50, List II (State List) empowers states to tax mineral rights, "subject to any limitations imposed by Parliament by law relating to mineral development."
- Entry 54, List I (Union List) gives Parliament power over regulation of mines and mineral development to the extent declared by law to be expedient in the public interest.
- The Court clarified that Parliament can limit — but had not, at the time, expressly limited — the states' taxing power under Entry 50.
- The judgment allowed states like Odisha, Jharkhand, and Chhattisgarh to raise significant additional mineral-related revenue and demand arrears from mining companies.
The 2026 Amendment Bill is widely understood as Parliament's exercise of the very limiting power the Supreme Court said it could use under Entry 50 — restricting states' taxation of mineral rights going forward, and clawing back the freedom the 2024 verdict had given states.
Centre-State Fiscal Federalism and the Seventh Schedule
Fiscal federalism in India rests on the distribution of legislative and taxation powers between the Union and states through the Seventh Schedule's three lists, along with the mechanism of Finance Commission transfers. Disputes like this one test the boundary between a state's autonomous revenue-raising powers (own tax revenue) and the Centre's power to regulate a sector for uniform national development.
Key Details
- Mineral-rich states derive a meaningful share of their own tax revenue from mining royalties, cesses (e.g. District Mineral Foundation contributions), and mineral-rights taxes, distinct from Finance Commission devolution.
- The Mines and Minerals (Development and Regulation) Act, 1957 is the principal central law occupying the field of mineral regulation and development under Entry 54, List I.
- Article 246 governs the distribution of legislative powers between Parliament and state legislatures across the Union, State, and Concurrent Lists.
- Centrally set conditions on state mineral levies, as proposed in the amendment, illustrate a recurring federalism tension also seen in GST compensation and cess-sharing disputes.
The dispute reflects a broader, recurring debate over how much fiscal autonomy resource-rich states retain when Parliament exercises its overriding regulatory powers under the Union List.
- The Supreme Court's Mineral Area Development Authority v. Steel Authority of India ruling (25 July 2024) was delivered by a nine-judge bench with an 8:1 majority.
- Entry 50 of the State List and Entry 54 of the Union List are the key constitutional provisions governing mineral taxation powers.
- The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 restricts states from imposing levies on mineral rights and mineral-bearing land except as permitted by centrally prescribed conditions.
- The Bill also addresses retrospective validity of state levies imposed before its commencement that remain uncollected.