Thiruvananthapuram, August 18: Kerala Chief Minister V.D. Satheesan has written to Prime Minister Narendra Modi, requesting an immediate review of amendments made to the Mines and Minerals (Development and Regulation) Act.
In his letter, Satheesan warned that these changes could limit the constitutional and financial powers of states, adversely affecting Kerala’s revenue interests.
The Chief Minister specifically objected to the proposed Section 9D, which would place the power to levy taxes, cesses, and other charges on mineral-rich land under criteria set by the central government. He argued that such a provision would directly interfere with the constitutional powers of the states.
The bill also includes provisions that would bring mineral-rich land under central regulatory control and eliminate outstanding tax liabilities of the state.
Satheesan cautioned that the proposed changes could have severe financial implications for Kerala, given the state’s substantial mineral resources. He noted that any restrictions on the state’s financial powers over mineral-rich land would impact not only state revenue but also the tax income of local self-governance institutions.
Demanding immediate intervention from Prime Minister Modi, Satheesan urged the central government to reconsider provisions that could undermine the financial autonomy of states.
He referenced a Supreme Court ruling from 2024 regarding mining rights, which clarified the distinction between royalties and taxes. The court stated that royalties paid for mining rights do not constitute a tax.
Satheesan highlighted that Entry 50 of List II in the Seventh Schedule of the Constitution grants states the power to impose taxes on mineral rights within the constitutional framework. He further explained that the Supreme Court acknowledged this power under Entry 49 of List II, allowing states to tax land with mineral resources based on the quantity or value of production.
He argued that the proposed amendments pose a risk to these powers, which have already been recognized as constitutional rights of the states.
This move by the Chief Minister comes at a time when the relationship between the center and states regarding financial powers has become a contentious issue. Kerala’s primary concern is that if control over mineral-rich land is transferred or if the state’s taxing authority is curtailed, it could create new revenue challenges for both the state and local governments.
Satheesan appealed to the Prime Minister to promptly address Kerala’s concerns and ensure the protection of the state’s constitutional and financial rights.
–
Leave a Comment