On the Mines and Minerals Amendment Bill, 2026: Parliament’s bid to undo the MADA judgement runs into the Constitution
The new Amendment turns states’ plenary taxing powers over minerals into a licence granted at the Centre’s discretion, setting up a serious constitutional challenge and dealing a fresh blow to fiscal federalism.
Published on: 18 August 2026, 09:07 am
THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) AMENDMENT BILL, 2026, (‘the Bill’) passed in both the Houses of the Parliament on August 13, 2026, amends the Mines and Minerals (Development and Regulation) Act (‘MMDR Act’) and prescribes conditions on the State Legislatures’ power to tax mineral rights and mineral bearing lands, and retrospectively invalidates every uncollected State levy as on date of its commencement. The implications of this Bill have to be understood in the backdrop of the Supreme Court’s nine-judge bench ruling in Mineral Area Development Authority v. Steel Authority of India (‘MADA’) which was decided on July 25, 2024.
The framework the Supreme Court settled in MADA
MADA settled three propositions. First, the State Legislatures enjoy plenary competence, i.e. a complete, absolute, and exclusive authority to govern a subject, under Entry 50 List II to tax mineral rights, subject only to such limitations as Parliament may impose by law relating to mineral development. Since the pre-amended MMDR Act did not contain any such limitation, the Supreme Court held that there is no restriction on the State Legislatures to tax mineral rights. Within this analysis, the Supreme Court also held that such limitation, if and when enacted by the Parliament by law, can be extended to prohibition as well.
Second, mineral bearing land falls squarely within “land” under Entry 49 List II, and the yield of the land (measured in quantity or value) supplies a permissible measure of the tax. Entry 49, unlike Entry 50, carries no textual subordination to any parliamentary limitation. Hence, it is in the exclusive domain of the State Legislatures to tax mineral bearing lands without any encroachment on the same by Parliament.
Third, Entry 54 List I is a regulatory entry, not a taxing entry, and Parliament cannot deploy it to reach into the fiscal fields of Entries 49 and 50 List II.
This piece sets out five broad heads of constitutional infirmities from that perspective.