The Indian parliament has approved a bill that limits states’ ability to levy taxes on mineral rights, as state revenues from mining and coal have seen significant growth over the past decade, shifting fiscal benefits increasingly to state governments.
Parliament has approved a bill that would curb states’ ability to levy taxes on mineral rights and mineral-bearing land, even as official figures show that state revenues from mining and coal have climbed sharply over the past decade. Union mines minister G Kishan Reddy said the change is meant to create a uniform rate structure across the country and would not strip states of income.
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026, cleared the Lok Sabha on Wednesday and the Rajya Sabha on Thursday, and now awaits the President’s assent before becoming law. According to data shared by the mines ministry, states’ mineral revenue rose from Rs 13,258 crore in 2014-15 to Rs 71,035 crore in 2024-25, while the Centre’s collections increased only modestly, from Rs 7,102 crore to Rs 8,932 crore.
That shift was even more pronounced in coal. State revenues from the sector rose from Rs 11,948 crore, or 55% of total collections, in 2014-15 to Rs 58,592 crore, or 96%, in 2024-25. Over the same period, the Centre’s share fell from 45% to 4%, underscoring how much of the fiscal benefit from coal has moved to state governments.
Reddy said the new law would not worsen the finances of any state and argued that receipts would continue to rise with output. He also said future revisions in mineral rates or cesses would apply uniformly nationwide. The passage of the bill comes as the mines ministry has already been moving to expand mineral production through separate rule changes this year, including measures designed to widen exploration and extraction of critical and deep-seated minerals.
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