BJD mounts pressure on BJP government over MMDR amendment act seeking special session of assembly
A resolution has been sought in Odisha for a special session of the state assembly to seek repeal of the Mines and Minerals (Development and Regulation) Amendment Act, 2026, on the ground that it curtails the state's constitutional power to tax mineral wealth.
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was passed by the Lok Sabha on 12 August 2026 and the Rajya Sabha on 13 August 2026, and received presidential assent on 17 August 2026.
The Amendment Act bars state governments from levying fresh taxes or cesses on mineral rights and mineral-bearing lands except within conditions prescribed by the central government, and restricts retrospective or unpredictable levies.
The stated objective of the Act is a uniform, predictable fiscal framework for the mining sector, addressing concerns of a heavy and non-uniform tax burden across states.
The dispute traces back to a 2024 nine-judge Supreme Court bench ruling that had affirmed states' constitutional power to tax mineral rights.
Seventh Schedule: Mining under List I and List II
The Constitution divides legislative subjects between Parliament and state legislatures through Article 246 read with the Seventh Schedule. Mining sits at the intersection of both lists: List I (Union List), Entry 54 empowers Parliament to regulate mines and mineral development "to the extent declared by Parliament by law to be expedient in the public interest." List II (State List), Entry 23 gives states power to regulate mines and mineral development, but this is expressly "subject to the provisions of List I" — i.e., subject to any Union law under Entry 54.
Key Details
- The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) is the Union law enacted under Entry 54, declaring Union control over mineral development "expedient in the public interest."
- List II, Entry 50 separately empowers states to levy "taxes on mineral rights," but this power is explicitly made "subject to any limitations imposed by Parliament by law relating to mineral development."
- The interplay of Entry 23, Entry 50, and Entry 54 determines how much room states have to legislate or tax in a Union-regulated sector — a recurring test theme in Centre-State relations.
The 2026 Amendment Act operationalises the Entry 50 proviso — Parliament using its law-making power over "mineral development" to cap and condition how far states can go in taxing mineral rights, which is the core of the current dispute.
Mineral Area Development Authority v. Steel Authority of India (2024)
This nine-judge Supreme Court bench, headed by then-CJI D.Y. Chandrachud, delivered its ruling on 25 July 2024 by an 8:1 majority. It held that state legislatures have the constitutional power to tax mineral rights and mineral-bearing land under Entries 49 and 50 of the State List, and that "royalty" payable under the MMDR Act is a contractual payment for mining rights, not a tax — so it does not by itself cap states' independent taxing power. This overturned the position taken in India Cement Ltd. v. State of Tamil Nadu (1990) and reaffirmed parts of State of West Bengal v. Kesoram Industries (2004).
Key Details
- Decided by a 9-judge Constitution Bench; verdict 8:1.
- Held: royalty is not a tax; states can additionally tax mineral rights/mineral-bearing land under Entry 50, subject only to actual Parliamentary limitations validly enacted "by law relating to mineral development."
- The ruling was widely read as strengthening fiscal federalism and states' revenue autonomy over natural resources located within them.
The 2026 Amendment Act is, in effect, Parliament now exercising the very limitation power the 2024 judgment had flagged as available to it — prescribing conditions under which states may levy fresh mineral taxes. States that benefited from the 2024 ruling view the amendment as clawing back that fiscal autonomy.
Fiscal Federalism and Resource Revenue
Mineral-rich states (e.g., Odisha, Jharkhand, Chhattisgarh) depend significantly on mining-linked revenue (royalty, cess, and now potentially independent mineral taxes) for their own fiscal space, distinct from devolution recommended by the Finance Commission. Centre-State disputes over natural resource revenue are a recurring theme alongside GST Council disputes and Finance Commission devolution debates.
Key Details
- Mining-linked levies include royalty (under MMDR Act rules), District Mineral Foundation (DMF) contributions (introduced by the MMDR Amendment Act, 2015), and state-specific cesses/taxes on mineral rights.
- Resource federalism disputes test the balance between national economic uniformity (attracting mining investment, avoiding a patchwork of state levies) and states' autonomy over resources within their territory.
The current standoff is framed by the state legislature as a loss of an independent, judicially-affirmed revenue stream, while the Union frames it as removing an unpredictable, non-uniform tax burden on the mining sector nationally.
- MMDR Amendment Bill, 2026: passed Lok Sabha 12 August 2026, Rajya Sabha 13 August 2026, presidential assent 17 August 2026.
- Mineral Area Development Authority v. Steel Authority of India: decided 25 July 2024, 9-judge bench, 8:1 majority.
- Constitutional basis: Article 246; Seventh Schedule — List I Entry 54, List II Entry 23, List II Entry 50.
- MMDR Act, 1957 is the principal Union legislation governing mineral development in India.