Jharkhand CM urges PM Modi to rethink MMDR Bill, flags ₹11,000 crore risk

Hemant Soren says proposed restrictions on states' mineral taxation powers raise constitutional and federal concerns and could hit Jharkhand's mining revenues

Jharkhand Chief Minister Hemant Soren has written to Prime Minister Narendra Modi seeking reconsideration of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, saying that the proposed restrictions on states' mineral taxation power "raise serious constitutional, fiscal, developmental and federal concerns."

 

Highlighting the potential financial impact on Jharkhand owing to the proposed amendments, Soren noted that mining revenue accounted for 84.9 per cent of the state's non-tax revenue in 2024-25. He said the state's Mineral Bearing Land Cess, enacted in 2024, was expected to generate around Rs 11,000 crore annually.

 

Soren also wrote a letter to the Leader of the Opposition in the Lok Sabha, Rahul Gandhi, pointing out the financial implications of the Bill and urging him for his support.

 

"The Mineral Bearing Land Cess has emerged as an important source of fiscal support, generating approximately Rs 1,379 crore in 2024-25, Rs 7,488 crore in 2025-26, and is projected to generate approximately Rs 13,215 crore in 2026-27 based on present trends," Soren wrote. "I would be grateful if you could raise this issue at appropriate forums, engage with the Government of India on the implications of the amendment."

 

In the letter to the PM, Soren argued that such revenues were critical for funding development programmes in mining-affected regions, including healthcare, education, rural infrastructure, drinking water, sanitation and social security initiatives.

 

At the centre of Jharkhand's objection is the proposed Section 9D of the MMDR Act, which restricts state governments from imposing taxes, cess or other levies on mineral rights and mineral-bearing lands except under conditions prescribed by the Centre.

 

Soren argued that the provision goes beyond Parliament's power to regulate mineral rights and affects the states' independent power to tax land. He referred to the Supreme Court's 2024 judgment in Mineral Area Development Authority versus Steel Authority of India, in which a nine-judge Constitution Bench recognised the states' power to tax mineral rights and mineral-bearing lands.

 

He said the Supreme Court had distinguished between Entry 49 of the State List, which deals with taxes on lands and buildings, and Entry 50, which deals with taxes on mineral rights. Soren said the top court recognised the legislative competence of state legislatures to tax lands comprising mines and quarries under Entry 49 of List II of the Seventh Schedule and held that mineral-bearing land falls within the expression "lands" for this purpose.

 

The distinction between Entry 49 and Entry 50 of List II is not incidental but foundational, Soren said, arguing that the limitation available to Parliament under Entry 50 does not extend to taxation of mineral-bearing lands under Entry 49.

 

Soren also said the restriction on taxation of mineral-bearing lands "appears to travel beyond the field that Parliament may competently occupy by ordinary legislation, and would, with respect, require an amendment to Entry 49 itself rather than to the Mines and Minerals (Development and Regulation) Act, 1957." He urged that Section 9D be confined only to mineral rights and not mineral-bearing lands.

 

Soren also objected to the Bill's provision invalidating mineral-related taxes, cess or levies that have not been recovered or deposited before the amendment comes into force. He added that this could affect legitimate statutory demands raised under state laws.

 

"The retrospective consequence proposed in the Bill is also a matter of serious concern," Soren said, adding that the provision could affect "legitimate statutory demands and outstanding dues arising under State legislation enacted pursuant to the constitutional and judicial position prevailing at the time."

 

Soren said the Supreme Court had already created a calibrated mechanism in its August 2024 order by allowing recovery of past dues from April 1, 2005, while staggering payments over 12 years and waiving interest and penalties for the period before July 25, 2024. He argued that the Bill instead "extinguishes, in a single stroke and without consultation," dues that were otherwise validly raised but whose recoveries were pending.

 

While opposing the Bill, Soren proposed a consultation framework involving mineral-producing states before the Centre frames rules under the amended law. He suggested a mechanism similar to the GST Council for discussions between the Centre and mineral-producing states. As an alternative, Soren requested that restrictions under Section 9D be limited to mineral rights under Entry 50, and that provisions relating to mineral-bearing lands be removed.

 

The Jharkhand CM also said the state reserves the right to seek constitutional and legal remedies if the present form of the Bill becomes an Act. "The State Government reserves its right, in the event the Bill is enacted in its present form, to take all appropriate constitutional and legal remedies available to it, including before the Hon'ble Supreme Court of India," Soren said.

 

Soren also wrote a letter to the President of India, Droupadi Murmu, who also served as the Governor of Jharkhand from 2015 to 2021, to carefully consider the constitutional, federal, fiscal and social implications of the Bill. The Bill now awaits presidential assent before it becomes an Act.