The Government has introduced The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 [Bill No. 154 of 2026] in the Lok Sabha to further amend the Mines and Minerals (Development and Regulation) Act, 1957. The proposed amendments seek to establish greater certainty, stability, uniformity and predictability in the fiscal framework governing the mineral sector, while promoting sustainable and balanced development of mineral resources across the country.
Minerals are critical natural resources with significant importance for infrastructure, including digital infrastructure, manufacturing, energy security and the overall economic development of the country. Considering the finite nature of mineral resources and their concentration in certain States, the Bill underlines the need for mineral extraction and management to be aligned with the long-term national objectives of sustainable, equitable and uniform development.
The Bill proposes to amend Section 2 of the MMDR Act, 1957 to bring the regulation of “mineral bearing lands” within the ambit of Union control, in addition to the existing provisions relating to regulation of mines and development of minerals. Correspondingly, a new definition of “mineral bearing land” is proposed to be inserted in Section 3 of the Act.
A key provision of the Amendment Bill is the proposed insertion of a new Section 9D in the MMDR Act. The proposed provision stipulates that a State Government shall not impose any tax, cess or other levy, by whatever name called, on mineral rights or mineral-bearing lands, whether based on mineral quantity, mineral value, royalty payable or otherwise, except in accordance with the conditions or restrictions that may be prescribed by the Central Government.
The Bill also addresses the issue of past fiscal demands. It provides that any such tax, cess or other levy which has not been deposited with or recovered by the State Government before commencement of the proposed Amendment Act shall be deemed invalid at all material times. However, taxes, cesses or other levies already deposited with or recovered by a State Government before commencement of the Amendment Act will not be liable to be refunded.
The proposed legislation has been brought forward against the backdrop of concerns arising from uneven and unrestricted fiscal impositions on mineral rights and mineral-bearing lands. According to the Statement of Objects and Reasons, such practices have resulted in issues including a high tax burden on the mining sector, unpredictable introduction of taxes and cesses after commencement of mining operations, multiple levies on mineral production or dispatch, non-uniformity of rates across States, and retrospective fiscal demands.
Excessive and unpredictable fiscal burdens can affect the commercial viability of mining operations, discourage mineral extraction and adversely impact production. They may also disproportionately affect small and medium-scale mining operators. Multiple and inconsistent levies could contribute to cascading costs, higher compliance requirements and an increase in the cost of mineral-based goods and services.
The proposed amendments are therefore intended to facilitate a balanced and harmonised fiscal regime for the mineral sector, while ensuring that the cumulative incidence of different levies does not become disproportionate to the economic value and profitability of mining operations. The framework also seeks to provide greater legal and fiscal certainty to investors and mining operators.
The Bill further proposes an amendment to Section 13 of the MMDR Act, 1957, empowering the Central Government to prescribe, through rules, the conditions or restrictions subject to which State Governments may impose taxes, cesses or other levies on mineral rights or mineral-bearing lands.
The Government has stated that the proposed reforms are expected to support harmonised mineral development and national economic growth, strengthen domestic mineral availability and contribute towards the objectives of Atmanirbhar Bharat and the vision of Viksit Bharat 2047.
The Financial Memorandum accompanying the Bill states that enactment of the proposed legislation would not involve any recurring or non-recurring expenditure from the Consolidated Fund of India.
The Bill provides that, upon enactment, it may be called the Mines and Minerals (Development and Regulation) Amendment Act, 2026, and will come into force on such date as the Central Government may appoint through a notification in the Official Gazette.
The Bill can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/THE-MINES-AND-MINERALS-DEVELOPMENT-AND-REGULATION-AMENDMENT-BILL-2026.pdf
