Ranchi: The Lok Sabha on Wednesday passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026 amid protests, paving the way for significant changes in the taxation of mineral resources. For mineral-rich Jharkhand, the proposed legislation could have a major financial impact, as it seeks to restrict states from imposing additional taxes, cesses or other charges on mineral rights and mineral-bearing land.
The move is particularly important for Jharkhand because the state has already introduced a cess on mineral-bearing land under the Jharkhand Mineral Bearing Land Cess Act, 2024. The state had expected this additional revenue to support welfare programmes and development initiatives.
According to estimates, Jharkhand could face an annual revenue loss of around Rs 8,000-10,000 crore if the new provisions come into effect. Such a reduction could put additional pressure on the state government’s finances and potentially affect funding for schemes such as the Mukhyamantri Maiya Samman Yojana, along with other social welfare and development programmes.
However, the Bill has not yet become law. It will have to be passed by the Rajya Sabha and subsequently receive the President’s assent before coming into force.
What does the Bill propose?
The proposed amendment seeks to prevent state governments from imposing additional taxes, cesses or other charges on mineral rights or mineral-bearing land. Any levy related to minerals would have to operate within the framework, conditions and limits prescribed under central law, including the applicable royalty provisions.
The legislation also makes it clear that taxes or cesses already collected or deposited before the new provisions take effect would not be refunded. In other words, the proposed restriction would apply to future collections and would not automatically require states to return revenue already collected.
The change could also have implications for Jharkhand’s long-standing demand for around Rs 1.36 lakh crore from the Centre in connection with mining-related dues. The state government has repeatedly raised the issue, arguing that it is entitled to substantial revenue linked to the exploitation of its mineral resources.
Centre cites need for uniformity
The Centre has defended the amendment as a measure aimed at bringing greater uniformity, stability and clarity to the mining sector. The government has argued that a predictable regulatory and taxation framework will encourage investment, improve the business environment and contribute to economic growth and the goal of a developed India.
The proposed restrictions, however, are likely to trigger a fresh debate over the financial powers of mineral-rich states and the sharing of revenue generated from natural resources.
Why Jharkhand is likely to be affected
Jharkhand introduced the Jharkhand Mineral Bearing Land Cess Act, 2024 to impose a cess on mineral-bearing land. The move followed the Supreme Court’s 2024 ruling concerning the power of states to levy taxes on mineral rights and mineral-bearing lands.
The state government had hoped that revenue from the cess would provide an additional financial resource for social security, welfare and infrastructure programmes. The proposed central legislation could now limit the state’s ability to continue raising such revenue in the future.
For Jharkhand, the issue is therefore more than a question of taxation. It touches upon the larger debate over how much financial benefit mineral-rich states should receive from the extraction of their natural resources.
If the Bill becomes law in its current form, the Jharkhand government may have to revise its revenue projections and explore alternative sources of funding for welfare and development programmes. The issue is likely to remain a major point of contention in the Centre-state financial relationship, particularly in a state where mining plays a crucial role in the economy.
By News Jharkhand Correspondent