Bengaluru, August 18: Karnataka’s Deputy Chief Minister G. Parameshwara has urged the central government to reconsider the Mines and Minerals (Development and Regulation) Amendment Bill, 2026. He expressed concerns regarding provisions in the bill that restrict the state’s constitutional power to levy taxes on mineral rights and mineral-rich land.
In a letter addressed to Prime Minister Narendra Modi and Union Minister for Coal and Mines G. Kishan Reddy, Parameshwara raised objections to the bill’s provisions and requested a review.
He referenced the Supreme Court‘s landmark 2024 ruling, which affirmed the legislative and financial powers of states concerning taxation on mineral-rich land and mineral rights under entries 49 and 50 of the state list.
Parameshwara stated that the central government’s unilateral approach raises serious questions about the framework of federalism in the nation. He called for meaningful consultations with all state governments before impacting constitutional fiscal powers.
He warned that the provisions of the bill could undermine the constitutional financial autonomy of mineral-producing states. Parameshwara insisted on structured and timely consultations with all state governments before imposing taxes on mineral authorities and mineral land.
Moreover, he urged the establishment of a center-state consultation mechanism to examine the constitutional, financial, economic, environmental, and investment implications of mineral taxation.
Parameshwara explained, “The proposed amendments to the MMDR Act will directly affect not only a theoretical future source of revenue but also the legislative domain that state legislatures have already exercised according to the constitutional position clarified by the Supreme Court.”
He argued that this issue should be viewed in the broader context of India’s evolving fiscal federal structure. He noted that states have relinquished significant taxation powers since the implementation of the Goods and Services Tax (GST), while their responsibilities in public infrastructure, education, healthcare, drinking water, agriculture, urbanization, and welfare programs continue to grow.
He emphasized that states face increasing responsibilities alongside a shortage of financial resources. Additionally, mineral-producing states must bear substantial social, environmental, and infrastructural costs associated with mining.
Parameshwara called for a predictable mineral taxation framework, suggesting that excessive or distorted taxation concerns could be addressed through consultations and rational limits, while still preserving national priorities related to critical minerals without undermining states’ fiscal voices.
He further warned that limiting the constitutionally recognized taxation domain immediately after the Supreme Court clarified its scope could set a precedent beyond mineral taxation.
He stated, “The central government should not only consider whether Parliament has any power but also how that power should be exercised within the spirit of cooperative federalism.”
Parameshwara proposed five measures for the central government to consider: withdrawing the MMDR Amendment Bill in its current form; conducting structured consultations with state governments; establishing a center-state consultation mechanism; considering existing and proposed state laws, including Karnataka’s 2024 Mineral Rights and Mineral Land Tax Bill; and developing a consensus-based national framework that protects investment, mineral development, and critical mineral security without undermining states’ constitutional financial autonomy.
He concluded, “Developed states are essential for a developed India. Economically self-reliant states are needed for an Atmanirbhar Bharat, and cooperative federalism requires states that are empowered partners, not economically dependent implementing agencies.”
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