India’s recently implemented mining penalty framework has sparked debate among experts, with critics warning that the new civil-penalty system may weaken enforcement at a time when the government seeks tighter control over the sector.
India’s new penalty regime for mining violations is drawing criticism from lawyers and industry specialists who say it may weaken enforcement just as the government is trying to tighten control over the sector. The Mines and Minerals Adjudication of Penalties Rules, 2026, notified by the mines ministry on 30 July and effective from 1 August, replace an older approach that tied punishment more closely to the value of illegally extracted minerals. The framework was introduced before the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, later received presidential assent on 17 August, as the Centre widened its grip over mining regulation.
Under the new rules, violations by lease holders are dealt with through a civil-penalty system, with fines linked mainly to the size of the lease rather than the economic gain from illegal extraction. The rules also allow a summary disposal process, meaning a case can be closed without a full inquiry if the lease holder pays the minimum penalty and fixes the breach. For larger leases, penalties can rise to ₹5,000-₹25,000 per hectare, subject to a ceiling of ₹50 lakh, while reporting-related breaches carry fixed caps based on lease size.
Former Odisha mining official U C Jena said the change could make penalties too predictable for those involved in illegal mining. He argued that the old system at least allowed authorities to recover the cost of unlawfully extracted minerals, whereas the new framework does not appear to preserve that option in any explicit way. Jena pointed to Odisha’s earlier experience with illegal mining, where the state initially raised claims worth ₹63,000 crore for mineral value and penalties in the 2001-10 period, later revised to ₹21,000 crore, of which about ₹16,000 crore was recovered.
Other specialists say the rules also raise legal and procedural questions. Deloitte partner Rajib Maitra said the old regime treated illegal mining and transport without authority as a criminal and cognisable offence, while the new one is designed around administrative penalties for regulatory breaches. Senior advocate Sankar Prasad Pani warned that the summary route could allow offenders to avoid inquiry too easily and said the three-year limit for filing complaints may be too short in cases where violations emerge only after data checks, such as production, dispatch, royalty or satellite records.
At the same time, some advisers see the rules as part of a broader effort to make mining enforcement more standardised and digital. Amit Bhargava, of KPMG in India, said the new framework is intended to streamline adjudication for major minerals and bring more structure, transparency and consistency to the process. That view sits alongside a wider pattern in 2026 of the Centre and several states tightening mineral regulation, even as the latest federal rules have prompted concern that civil penalties may not be strong enough to deter large-scale illegal extraction.
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