In the second week of August, former Chief Minister Naveen Patnaik wrote to Chief Minister Mohan Charan Majhi, urging him to convene a special session of the Odisha Legislative Assembly. There was no natural disaster or extraordinary occasion to warrant such a demand. Yet, for the political fraternity, particularly the Opposition parties, the largest being Patnaik’s Biju Janata Dal (BJD), the issue was serious enough to be described as a potential financial disaster for Odisha. 

The immediate trigger was the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, which was passed by both Houses of Parliament on August 13. It became an Act after it got the assent of President Droupadi Murmu. 

According to the Ministry of Mines’ 2024-25 annual report, mineral production (excluding Atomic, Fuel and Minor Minerals) was estimated in 20 States, of which about 97.70% of the total value was confined to eight States.  Odisha accounted for the largest share, at 43.49%, followed by Rajasthan (16.26%), Chhattisgarh (13.69%), Karnataka (12.42%), Maharashtra (4.76%), Jharkhand (3.26%), Madhya Pradesh (2.78%) and Andhra Pradesh (1.04%). Remaining states contributed 2.30%.

The MMDR Act states its objective: “…in view of the larger public interest, the Union has taken under its control the regulation of mines and the development of minerals….” It also says that “extraction and management have to be guided by long-term national goals”. It also cites heavy and non-uniform taxes as adversely affecting mineral production.

Under the MMDR Act, “the Union will take under its control the regulation of mineral-bearing lands”. It also provides that “no tax, cess or such other levy (by whatever name called) shall be imposed by the State government on mineral rights or mineral-bearing lands”.

In its press release, the Central government said, “The amendment... will not take away any of the rights of the States on land and minerals or any tax on minerals collected by the States.” It also says the amendment will not impact minor minerals. 

Several stakeholders in Odisha, however, feel that they could significantly erode the State’s authority over its mineral resources and adversely affect its fiscal interests. This is not just about mining policy or government revenue, but also about the people, mostly tribals, who have been living with the environmental and social costs of mining for generations.

People impacted on ground  

In Ransol village, in Odisha’s Jajpur district, Ishwar Chandra Mohanta is battling cancer. He does not know how he developed the disease. However, Mohanta claims seven other people from his village have already died of cancer. His home lies in the Sukinda Valley, which contains 98% of India’s chromite resources. 

The first chromite mine near his village was suspended in 2000, but for people like Mohanta, the consequences of decades of mining have not disappeared with the closure of a mine. Chromite mines are a source of dangerous hexavalent chromium pollution that has carcinogenic effects.

Mohanta represents the other side of Odisha’s mineral story. While the State’s vast reserves of iron ore, coal, chromite, and other minerals have attracted industries and generated enormous revenues, communities living around mining belts have often borne the environmental and health burdens.

Their grievances have traditionally been directed at the State government, which remains accountable to them for regulation, rehabilitation, environmental protection, and local development. The concern now is that the MMDR amendment could create a situation in which that accountability is blurred.

Patnaik, five-time CM and now Leader of the Opposition, says, “If the Central government takes away the State’s authority over mineral-bearing lands and its right to levy cesses, only pollution, displacement, and the burden of mining will remain with Odisha.”

What the tweak is all about

The MMDR Amendment Act, 2026, is an amendment to the 1957 Act. Section 2 now provides that the phrase “regulation of mines” will be followed by “and mineral-bearing land”.

This is a fundamental shift, argues Umesh Jena, former Additional Director of Mines, who has over 30 years of experience in dealing with regulation pertaining to mining. “Earlier, the Centre’s role was confined to the regulation of mines. Now, by insertion of ‘mineral bearing land’, the Union government has expanded its control over larger areas. It is tampering with the State’s power. Land is a subject which is on the State list,” Umesh asserts. 

Insertion of a new section, 9D, is at the core of the discomfort. The amendment says the State government will no longer be able to tax or raise a cess or levy on mineral rights or mineral-bearing lands. These terms will be dictated by the Central Government.

Umesh says the insertion of Section 9D has two implications: it prohibits States from earning from new taxes, and also stops States from collecting taxes due through court orders.

The immediate repercussion for Odisha is the loss of thousands of crores in penalties. In 2021-22, Odisha had imposed a ₹22,000 crore penalty on different miners for excess mining in violation of environmental clearance. “The State had collected ₹16,000 crore from defaulting lessees before my retirement. Still, a large chunk is left to be collected. This will not come to the State’s exchequer, because of the amendment. This is a direct gift to mining companies,” says Umesh.

In a statement accompanying the Act, justifying the amendment, G. Kishan Reddy, Union Minister of Coal and Mines, says, “Unbalanced imposition of steep taxes and levies will prompt the industry to completely bypass local supply lines, leading to sub-optimal development of markets, increased transportation costs and the resultant pollution load.” He adds that despite having sufficient mineral resources within India, we may end up importing them because domestic supply gets expensive. 

Former Union Minister and Congress leader Srikant Jena, however, terms the new amendment as an instrument to offset the July 25, 2024, judgment of a nine-judge bench of the Supreme Court headed by then Chief Justice D.Y. Chandrachud that had held that State governments have the power to collect tax on mines and minerals. On August 14, 2024, the Supreme Court further clarified that the State could collect the arrears of tax retrospectively from April 1, 2005, while mine owners could pay the arrears in instalments over 12 years, from April 1, 2026.

In 2004, the Odisha government had enacted the Odisha Rural Infrastructure and Socio Economic Development (ORISED) Act. This was challenged by miners in the Orissa High Court. The HC subsequently struck down the law. The State government took the fight to the Supreme Court. Now, the Odisha government’s two-decade-long efforts to tax miners have come to an end. The taxes raised under ORISED were meant to benefit mining-affected areas and communities through spending on infrastructure, education and employment. 

Srikant, the former Union Minister, asserts that following the SC judgment, Odisha stood to reclaim over ₹1 lakh crore in retrospective dues since 2005, which it could have collected from April 1, 2026. Besides, Odisha would have earned ₹50,000 crore annually through the cess on future mining operations, he points out. The State has, however, not officially estimated the extent of potential loss.

Odisha, India’s mineral powerhouse

The scale of Odisha’s mineral resources explains why the amendment has triggered such strong apprehension in the State. According to the Ministry of Mines’ 2024-25 report, Odisha produced minerals valued at ₹67,955.89 crore, the highest among Indian States. Rajasthan was a distant second, with mineral production valued at ₹23,993.59 crore.

The State’s finances are deeply intertwined with the mining sector. Mining accounted for 37.59% of Odisha’s total projected State revenue in 2026-27, although its contribution has fallen below 40% over the last two financial years, from 2025-26 to 2026-27.

“In the aftermath of the MMDR Act, the possibility of losing such a substantial amount of potential revenue is a matter of serious concern for Odisha’s economic interests,” says Suresh Panigrahi, State secretary of the CPI(M).

The economic debate also has a human dimension. Environmentalist Prafulla Samantara points out that much of Odisha’s mineral-bearing land is inhabited by tribal communities, many of whom continue to remain poor despite living amid some of the country’s richest mineral deposits.

“In one stroke, the Centre has taken away the State’s ability to design welfare programmes for these tribal communities based on additional resources that could have been mobilised from the mining sector,” alleges Samantara, a recipient of the Goldman Environmental Prize, an international award honouring those working at the grassroots. He argues that the amendment is primarily designed to benefit large corporate houses.

He also raises a fundamental question: who will the tribal communities turn to if infrastructure and socio-economic conditions in mining-affected areas deteriorate further under the pressure of mining? “People will either be at the mercy of corporate houses or the Centre, which has overlooked the ground realities,” he observes.

In Kalarangi village, 70-year-old Lata Barik says villagers remain dependent on three tubewells for drinking water and bathing, even after thousands of tonnes of chromite have been extracted from the surrounding areas over several decades. She is unaware of the parliamentary debate over the MMDR (Amendment) Bill, but its consequences are likely to be felt by people like her on the ground.

In Kaliapani village, Anjali Behera says mineral transportation has made it difficult for residents to even step outside their homes at times. She alleges that neither the government nor mining companies have done enough to address pollution and the decline in villagers’ livelihoods. “Their only objective is to maximise profits from the mines,” she says.

For villagers, the central concern is accountability. If the State’s powers over mineral resources are diluted, they fear being caught between multiple layers of government, with each potentially passing responsibility to the other while the communities bearing the social and environmental costs of mining are left without an effective avenue for redress.

Political cauldron keeps boiling

The political temperature in Odisha has risen sharply as the State’s economy remains deeply dependent on mining across several districts. Opposition parties alleged that the Bharatiya Janata Party’s MPs did not raise their voices against the amendment in Parliament.

“Although the Prime Minister has repeatedly spoken about cooperative federalism since assuming office, it is clear that the main objective of this amendment is to centralise powers,” Odisha Pradesh Congress Committee president Bhakta Charan Das alleges.

Bhrugu Baxipatra, senior general secretary of the BJD, has described the Act as “anti-Odisha”, arguing that it could result in a larger share of the State’s mineral wealth flowing to Delhi.

Social media platforms, meanwhile, have been flooded with reactions from political parties and civil society groups, with voices across the spectrum demanding that the Majhi government clarify its position and explain how it proposes to protect Odisha’s fiscal and constitutional interests.

Despite repeated attempts to contact Odisha Steel and Mines Minister Bibhuti Bhushan Jena and Steel and Mines Secretary Deoranjan Kumar Singh for their comment, they were unavailable.

The Centre, however, clarified that the amendment will not take away any of the rights of the States on land and minerals or any tax on minerals collected by the States. At present, out of the total taxes and statutory payments from mining, around 90% accrues to the States and this arrangement will continue even after the amendment, it says.

(Edited by Sunalini Mathew and Amarjot Kaur)