Why in news
- The Union Government formally notified provisions under the amended MMDR framework amid fiscal objections raised by mineral-rich States.
What is the MMDR Act, 1957?
- Principal central legislation governing the grant of mining leases, prospecting licenses, and development of major and minor minerals in India.
- Empowers the Union Government to regulate mineral development while States retain land ownership and collect royalties.
Key changes notified
- Centralizes auction processes and terms for critical and strategic minerals to streamline supply chain security.
- Restricts unilateral state-level levy modifications on mineral-bearing land beyond statutory royalty caps.
Why it matters
- Highlights ongoing federal conflicts regarding State powers to levy taxes on mineral rights following recent Constitution Bench interpretations.
- Impacts revenue autonomy of resource-rich States and private investment certainty in critical mineral exploration.
Key terms
Royalty
A statutory payment made by a mining lease holder to the state resource owner based on the volume or value of mineral extracted.
Critical Minerals
Minerals essential for high-technology, clean energy, and defense applications whose supply chains face severe disruption risks.
Prelims facts
- State legislative powers over mineral development under Entry 23 of the State List are subject to Union regulation under Entry 54 of the Union List.
Mains discussion
- Examine the fiscal federalism implications of central regulatory control over critical minerals versus State taxation rights.
Source: Hindu Business Line
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