By Nageshwar Patnaik in Bhubaneswar, August 29, 2026: “The treasury has its source in the mines”. In Arthasashtra, Chanakya also known as Kautilya–one of the earliest known political thinkers and king makers, has said underscoring the importance of mining governance. Minerals bring revenue to the government and the state owns all the minerals above or under the ground.

The States had the right to levy taxes on mineral rights till the Mines and Minerals (Development and Regulation) Amendment Act, 2026 passed in Parliament on August 13 this year restricted on states’ powers to tax mineral rights and mineral bearing lands. The Statement of Objects and Reasons of the Bill notes that uneven imposition of taxes and other levies by states in the absence of reasonable limitations has led to several issues.

The Act empowers the Central government to control the regulation of mines and development of minerals. The Bill adds that the Central government will also be empowered to regulate mineral bearing lands. Mineral bearing land is defined as any land having mineral contents in accordance with parameters prescribed by the Central government. Though land is a state subject under Entry 18 of the State List and gives state legislatures the power to tax land (Entry 49 of the State List), the amended Act adds that mineral-bearing lands will also be under the Central government’s control.

However, the apparent infringement of the state’s rights over its mineral resources by the amendment of MMDR Act is now being opposed by former Odisha Chief Minister and union mines and steel minister Naveen Patnaik, who has released a series of video messages describing the amendment as “anti-Odisha” and accused the Centre of taking away the state’s rights over its mineral resources. His Party Biju Janata Dal (BJD) has demanded an all-party meeting and a special session of the Odisha assembly to oppose the legislation.

Odisha is the largest mineral producing state in India, accounting for 43.7% of the country’s total value of mineral production (including metallic and non-metallic minerals but excluding fuel oil and atomic minerals) in 2024-25. Mining contributes an estimated 21% of Odisha’s total revenue pool.

Though Jharkhand started collecting rent after the Supreme Court verdict in 2024, Odisha’s similar law named the Orissa Rural Infrastructure and Socio-Economic Development Act, 2004 was struck down by the Orissa High Court in 2005, and the state’s appeal sat before the Supreme Court since 2006, unresolved. Industry and state estimates put its annual loss at roughly ₹12,000 crore, with over ₹1 lakh crore in outstanding dues.

Senior advocate of the Orissa High Court, Laxmikant Pangari said the Supreme Court in 2024 ruled that mineral bearing land falls within the description of lands under Entry 49, and states may tax such land using the quantity of minerals produced or the royalty payable.

“The SC held that Parliament may, through a law relating to mineral development, impose limitations on states’ power to tax mineral rights under Entry 50. However, this power does not extend to the states’ power to tax land under Entry 49. Entry 54 of the Union List enables Parliament to regulate mines and mineral development.

However, the Supreme Court clarified that Entry 54 is a general regulatory power, and Parliament’s power to impose restrictions under a mineral development law operates only on the taxation of mineral rights, not on the taxation of land. Parliament may not have the legislative competence to regulate mineral bearing land and the Act raises serious questions on federal character of our country,” he said.

Meanwhile, Naveen Patnaik has urged Odisha’s BJP MPs to seek reversal of the MMDR amendments. He says the changes will curb the state’s mineral taxation powers and hurt Odisha’s interests. In a letter to BJP MPs from Odisha, he urged them to seek a reversal of the amendments to the MMDR Act that would restrict the state government’s powers to levy taxes on mineral rights and mineral-bearing land parcels.

“I earnestly appeal to you (BJP MPs) to listen to your conscience and think about the future generations of Odisha. I appeal to you to challenge and call for a reversal of the amendment made in the MMDR Act that takes away the powers of the state government.” Patnaik said adding that Parliament is the “highest temple of Indian democracy” and that MPs are the voice of Odisha in this “tallest forum of democracy”.

In the letter, he said, “The people of Odisha elected you in good faith to protect their interests. It is therefore a matter of utmost concern that you voted in favour of one of the most arbitrary legislations that will have far-reaching adverse implications for the people of Odisha who put their trust in you.” Patnaik described August 13, the day the Bill was passed in the Lok Sabha with the support of Odisha BJP MPs, as a “black day” for the state.

“The Bill was passed with less than ten minutes of discussion in the Lok Sabha, despite having provisions with far-reaching implications for the people of Odisha. This was not an ordinary piece of legislation.” Patnaik had recently written to Chief Minister Mohan Charan Majhi as well, asking him to convene a special session of the Assembly to deliberate on the MMDR Amendment Act, 2026.

Former Union Minister Dharmendra Pradhan Saturday said the MMDR Amendment Bill, 2026 would protect Odisha’s mineral revenue while supporting industrial growth, employment and the state’s broader economic interests. Responding to Leader of Opposition Naveen Patnaik’s letter to Odisha MPs, Pradhan said it was inappropriate to withhold facts and create fear among the people of Odisha through what he described as misinformation.

Addressing concerns over Odisha’s share of mining revenue, Pradhan said the apprehension that the state would lose its revenue was unfounded. He said that under the new law, nearly 90% of the total revenue generated from the mining sector would go directly to the state treasury. Odisha would also continue to receive 110% of its auction premium, 15% royalty and its entire share of District Mineral Foundation (DMF) funds, according to Pradhan.

He contrasted the current revenue position with the period before 2014, claiming that Odisha’s annual mining revenue was then around ₹5,000 crore. According to Pradhan, the Narendra Modi government’s 2015 MMDR reforms introduced a transparent e-auction system and increased the royalty rate from 10% to 15%. He said these measures helped Odisha’s annual mining revenue increase nearly tenfold to around ₹50,000 crore.

A major point raised by Pradhan was Section 9D of the amended legislation. He said the provision would prevent the imposition of uncontrolled and arbitrary levies on mineral-bearing land. Pradhan argued that excessive charges could have increased raw-material costs and affected mining and industrial operations in districts such as Keonjhar, Sundargarh, Jharsuguda, Angul and Jajpur.

He warned that higher costs could threaten industrial operations and employment opportunities for thousands of workers and young people. He also said increased raw-material prices could raise the cost of steel, cement and electricity, potentially putting additional pressure on middle-class households.

However, the opposition BJD has geared up to fight inside the Assembly and the Parliament to build pressure. “We will also speak to other mineral-rich states like Jharkhand and Chhattisgarh. If nothing happens, then we will do whatever is necessary even if that means going to the Supreme Court. The Supreme Court’s 2024 judgment was delivered by a nine-judge Constitution Bench which held that states have the right to levy taxes on mineral rights. If we approach the Supreme Court, we are hopeful (of a positive verdict),” former minister and senior BJD leader Pratap Jena on Friday said his party may approach the Apex Court.

Jena’s party colleague and senior BJD leader Debiprasad Mishra also said that his party is examining the judicial option. “But we have to adopt different methods. Political agitation is one way and legal action is another. Even though it has become an Act, it can still be challenged because it negates the very spirit of the Supreme Court’s earlier pronouncement,” he said.