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The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was passed by both Houses of Parliament on 13 August 2026, amending the MMDR Act, 1957 with the stated aim of bringing long-term stability to the major minerals sector.
The Ministry of Mines states the amendment will not take away any State right over land and minerals, will not remove any tax on minerals collected by States, and will not affect States' power to regulate and tax minor minerals.
About 90% of total taxes and statutory payments in mining accrues to the States and the Ministry says this arrangement will continue; from FY 2015-16 to FY 2025-26 over ₹5 lakh crore accrued to major mining States against ₹82,000 crore to the Centre.
States currently levy around 14 types of taxes, charges, fees and levies on mining — royalty, auction premium, dead rent, District Mineral Foundation contribution, GST and transit fee among them.
The Ministry's argument is that uneven and steep State-level levies inflate domestic mineral costs and push industry towards imports; India imported minerals worth ₹10,12,529 crore in FY 2025-26.
The foundational statute governing the grant of mineral concessions, royalty and the regulation of mines other than minor minerals. The 2026 Bill amends it.
Replaced discretionary allocation of mineral concessions with mandatory auction, and created two institutions — the District Mineral Foundation in every mining-affected district, funded by a levy on leaseholders, and the National Mineral Exploration Trust to fund exploration. Auction premium, the largest new State revenue stream cited in this release, is a direct consequence of that 2015 change.
State List Entry 23 gives States the power to regulate mines and mineral development, but expressly subject to Union List Entry 54, under which Parliament may declare such regulation to be in the public interest and occupy the field. The MMDR Act is that declaration, and this Entry 54 / Entry 23 relationship is the constitutional hinge on which every dispute about mineral taxation turns.
A nine-judge bench of the Supreme Court held, by 8:1 on 25 July 2024, that royalty under the MMDR Act is not a tax and that State legislatures retain the power to tax mineral rights and mining lands. A subsequent order of 14 August 2024 allowed the ruling to operate from 1 April 2005, with no penalty or penal interest for the intervening period and dues payable over twelve years. That judgment is the legal backdrop against which fiscal predictability in mineral taxation became a live policy question.
Royalty is a payment to the State for every tonne of mineral actually extracted — a price for the resource, which the Supreme Court in 2024 held is a contractual consideration rather than a tax. Dead rent is the floor: a fixed annual charge payable on the leased area whether or not any mineral is raised, so a lease cannot simply be held idle. Auction premium is the newest layer, created by the 2015 amendment — the percentage of mineral value the winning bidder offers to the State above everything else, quoted competitively at auction. On top of these sit the District Mineral Foundation contribution, calculated as a share of royalty and spent on welfare in mining-affected areas, plus GST, transit fees and State-specific cesses, which is how the count reaches roughly fourteen. The policy problem the Ministry describes follows from that structure: because the layers are set by different authorities and change independently, a miner cannot know today what the total burden will be over a lease running decades — and that uncertainty, rather than the level of any single levy, is what the Bill claims to address.
Simple Analogy: Royalty is the price per unit of what you take out, dead rent is the standing charge for holding the tap, and auction premium is what you bid to get the tap in the first place — three separate meters on the same connection.
Work for the interest and benefit of persons and areas affected by mining operations
Key: A non-profit trust established in every district affected by mining under the MMDR Amendment Act, 2015, funded by a contribution from leaseholders calculated as a proportion of royalty.
Direct DMF funds to welfare and development in mining-affected areas
Key: The scheme that governs how DMF money is spent — on drinking water, health, education, sanitation, skill development, environment and the welfare of women, children and the aged in mining districts.
Fund regional and detailed exploration of mineral resources
Key: Also created by the MMDR Amendment Act, 2015, financed by a levy on concession holders, and used to expand India's exploration coverage — the weakest link in converting geological potential into auctionable blocks.
Build a resilient value chain for the minerals essential to green technologies and advanced manufacturing
Key: Approved by the Union Cabinet in January 2025 with government expenditure of ₹16,300 crore within a total outlay of about ₹34,300 crore over seven years, the balance expected from public sector enterprises. It covers exploration, acquisition of overseas assets, recycling and stockpiling.
Administers the MMDR Act and mineral policy for major minerals other than coal, lignite, petroleum and atomic minerals, which sit with other ministries.
The national geoscience agency responsible for geological mapping and mineral exploration, including the exploration projects that generate blocks for auction and the search for critical minerals.
Own the minerals in the land within their territory, grant concessions through auction, and collect royalty, dead rent, auction premium and other levies — the roughly 90% share of mining revenue the release describes.
The Entry 54 versus Entry 23 relationship in the Seventh Schedule, and the 2024 nine-judge ruling on States' power to tax mineral rights, make mining the standard case study for the limits of Union pre-emption over a State field.
The National Critical Mineral Mission depends on blocks reaching auction and production quickly, which is exactly what a stable and predictable fiscal regime is meant to enable.
Mineral imports of ₹10,12,529 crore in FY 2025-26 connect this debate to the current account and to the Make in India manufacturing agenda.
The DMF and PMKKKY route a share of royalty back to the districts that bear the environmental and displacement costs — the redistributive counterpart to the revenue argument.
Sand, stone, gravel and similar materials are minor minerals under the MMDR Act and remain entirely within State regulatory and taxing power, which the release confirms is unaffected.
GS Paper 3 > Indian Economy > Mineral Resources; GS Paper 2 > Federalism and Centre-State Relations
General Awareness > Economy and Legislation
General Awareness > Economy and Polity
General Awareness > Current Affairs
The MMDR framework, DMF and PMKKKY recur in Prelims; the 2024 mineral taxation judgment and the critical minerals agenda have made this an unusually active area.
A payment to the State for each unit of mineral extracted; held by the Supreme Court in 2024 not to be a tax.
A fixed annual charge on the leased area, payable whether or not mineral is extracted.
The amount quoted by the successful bidder at a mineral auction, a State revenue stream created by the 2015 amendment.
Building stone, gravel, ordinary sand and similar materials, regulated and taxed entirely by the States.
A district-level trust funded by a share of royalty, working for the benefit of persons and areas affected by mining.