Kerala CM flags threat to State powers from mining law changes, writes to PM Modi

Kochi: Kerala Chief Minister V.D. Satheesan has written to Prime Minister Narendra Modi seeking an urgent review of the proposed amendments to the Mines and Minerals (Development and Regulation) Act. He warned that the changes could weaken the constitutional and fiscal powers of States and affect Kerala’s revenue interests.

Satheesan has raised particular concerns over proposed Section 9D of the Bill. The provision would make the power to levy tax, cess and other charges on land containing mineral deposits subject to criteria prescribed by the Centre.

The Chief Minister argued that this could directly interfere with the constitutional powers of state governments.

Kerala flags financial implications

The Bill also proposes bringing land containing mineral deposits under the Centre’s regulatory ambit and extinguishing outstanding State tax liabilities, Satheesan said.

He warned that the changes could have serious financial consequences for Kerala, which has significant mineral resources. Any restriction on the State’s fiscal powers over mineral-bearing land could affect both State revenue and the tax income of local self-government institutions.
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CM cites Supreme Court judgment

Satheesan also referred to the Supreme Court’s 2024 judgment on mining rights. He said the court had clearly distinguished between royalty and tax, holding that royalty payable for mining rights is not a tax.

He further pointed to Entry 50 of List II of the Seventh Schedule of the Constitution, which empowers States to impose taxes on mineral rights, subject to the constitutional framework.

The Chief Minister also noted that the Supreme Court had recognised the States’ power under Entry 49 of List II to levy taxes on land containing mineral resources based on the quantity or value of mineral production.

Seeks PM’s intervention

Satheesan said the proposed amendments risk undermining powers that have already been recognised as belonging to the States under the Constitution.

He urged Prime Minister Modi to intervene immediately and reconsider the provisions to ensure that the constitutional and fiscal powers of States are protected.

(With IANS inputs)