Aug 14, 2026 15:06 pm IST

The Coast Pays, Delhi Collects: What The Centre's Mineral Bill Takes From States

India's mineral wealth may lie with the states, but the power to tax it is increasingly travelling north.

Shashi Tharoor Shashi Tharoor MP, Columnist

Shashi Tharoor MP, Columnist

On August 12, the Lok Sabha passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026. There was no debate. What the House voted upon was the reversal of a judgment nine judges of the Supreme Court had spent thirteen years arriving at, and the extinction of a taxing power that belongs, under our Constitution, to the states.

Let me be fair to the Government, for its case is not frivolous. In July 2024, in Mineral Area Development Authority v. Steel Authority of India, a nine-judge Bench held by eight to one that royalty is not a tax but a contractual payment, and that the states retain their own power to tax mineral rights and mineral-bearing land. Correcting an error of 1989, it allowed demands back to 2005, payable from this April, leaving mineral states with claims worth thousands of crores and industry with matching liabilities. That deserved an answer.

But this Bill raises more questions than it has tried to answer.

Let's begin with where the matter was first settled: the Constituent Assembly itself. In December 1948, Professor KT Shah asked the Constituent Assembly to declare all natural wealth - our land, our minerals, the seas around our coasts - to be public property, held privately by no one and worked by public enterprise alone. The Assembly declined. Our Constitution vests the ownership of minerals in nobody but the owner of the land, and land is Entry 18 of the State List. Where the framers wanted the Union to own a resource, as with the seabed in Article 297,........

© NDTV