Mining Amendment Is Unfair to States

Two Years After States Won This Fight, a New Law Quietly Reopens It In July 2024, a

nine-judge Constitution Bench of the Supreme Court settled a three-decade-old question: states can tax mineral rights under Entry 50 of the State List and mineral-bearing land under the separate, unqualified power in Entry 49.

It overturned a 1989 ruling that had treated royalty as a tax and squeezed state revenue for over thirty years. Resource-rich states like Odisha and Chhattisgarh, for whom mining receipts form a major share of non-tax revenue, treated this as a genuine constitutional restoration.

The MMDR Amendment Act, 2026 changes the terrain again - not by overturning the judgment directly, but by inserting Section 9D, which makes state levies on mineral rights and mineral-bearing land conditional on a framework the Centre prescribes.

Nothing in the amendment says states cannot tax minerals. What it does is place a Centre-controlled ceiling on how they may.

The Argument That Actually Deserves a Hearing The

Centre's case isn't a smokescreen. Mining investments run for decades; if a company can't predict what a state might levy next year, that uncertainty gets priced into every investment decision and downstream sectors - steel, cement, power - absorb whatever margin that uncertainty costs. A predictable tax ceiling genuinely serves an economy that needs mining investment to keep flowing.

Why That Argument Doesn't Settle the Constitutional Question Entry 50

was always written with an escape hatch - Parliament can limit state taxation of mineral rights through mineral development law. That's not new and Section 9D's restriction on mineral rights taxation sits inside a power the Constitution always gave the Centre.

The harder problem is Entry 49. That entry - taxes on lands and buildings - carries no equivalent limitation clause. The 2024 judgment explicitly held that mineral-bearing land falls within this unqualified state power. By extending Section 9D's restriction to land as well as rights, the amendment reaches into a constitutional space Parliament was never given the key to unlock.

What This Actually Costs If Section

9D stands as written, it doesn't just cap one revenue stream - it converts a landmark judgment recognising real state fiscal autonomy into a power that exists on paper but functions only within Centre-set limits in practice.

For a state absorbing the environmental damage, displacement and infrastructure strain of extraction, being asked to fund that recovery from a levy the Centre can adjust at will is a materially different deal than the one the Constitution - and the Court - described in 2024.

The debate isn't investment versus tax. It's whether predictability for one party should come pre-loaded with a ceiling on the fiscal autonomy the State List was built to protect.