The government introduced an amendment bill in the Lok Sabha that would bar states from imposing taxes or other levies on mining and mineral rights and seek to bring mineral-bearing lands within central regulation under the Mines and Minerals (Development and Regulation) Act of 1957. The measure was moved by the minister of coal and mines, G Kishan Reddy, amid protests from opposition members in the House. The bill was presented as an effort to clarify the scope of Union powers over minerals and to streamline the regulatory environment.

The proposed insertion of a new section 9D would provide that no tax, cess or other levy may be imposed by a state government on mineral rights or mineral-bearing land except in accordance with conditions or restrictions prescribed by the central government. The bill therefore seeks to limit state fiscal measures that are linked to mineral quantity, mineral value or royalty and to vest greater legislative control with the Union. The draft legislation contains definitions and parameters to be prescribed for identifying mineral-bearing land.

The proposal follows a Supreme Court ruling over two years ago that had affirmed states' rights to tax mines and mineral-bearing land, with the court distinguishing royalty paid to the central government from a tax. The government said the amendment aims to reduce the financial burden on mining operations and make them commercially attractive to investors. Officials also argued the change would improve predictability for licences, exploration and extraction activities that are central to mineral development.

Under the current framework, the centre's regulatory remit is largely limited to mining activities such as exploration, extraction, licensing and operations, while the underlying land has remained outside explicit Union control. That distinction, the bill contends, has allowed divergent state interpretations on taxes and levies linked to mineral-bearing land and complicated investor decision making. The measure would define mineral-bearing land in accordance with parameters set by the central government and attempt to harmonise the legal treatment across jurisdictions.