New minerals law infringes on Odisha’s rights, Naveen Patnaik says

On the heels of the Parliament endorsing the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, Biju Janata Dal (BJD) chief and ex-Odisha chief minister Naveen Patnaik expressed worry over the proposed legislation, branding it a "violation of Odisha's financial autonomy". Patnaik, whose party had also voted against the Bill in the Rajya Sabha, contended that the statute endangers "Odisha's fiscal liberty and constitutional entitlements" to its natural resources.

In a missive to Odisha Chief Minister Mohan Charan Majhi, Patnaik stated that the Bill would cause disproportionate revenue losses and impede the state's developmental trajectory. He also urged an all-party gathering to forge a cohesive stance for preserving Odisha's federal rights and mineral earnings, citing the "long-term adverse impact" of the legislation on the state's economy.

The BJD chief, currently the Leader of the Opposition in the state Assembly, called for a special Assembly session to pass a unanimous resolution opposing the new MMDR Act and to protest the Central government's "appropriation of state powers". Patnaik objected to provisions expanding Union control under Section 2 to encompass "mineral-bearing lands" and to the clause that explicitly disallows states from levying taxes, cesses, or similar charges on mineral rights or mineral-bearing lands.

He also contested the amendment granting the Central government exclusive authority to draft rules limiting states' capacity to impose taxes on minerals. Patnaik emphasized that Odisha's mineral wealth belongs to its populace, and mining revenues are vital for financing healthcare, education, social welfare initiatives, and infrastructure.

He argued that stripping the state of its power to impose taxes and cesses on its mineral-bearing lands, as the Union Government has done, severely undermines federalism and state revenue autonomy. Patnaik further noted that fiscal autonomy is a constitutional tenet in the federal system, and the Bill directly weakens a key aspect of the Centre-State relationship, moving India's federal framework in a regressive direction and impinging on cooperative federalism.

The legislation becomes crucial as the Supreme Court, in July 2024, affirmed the right of states to levy taxes on mineral rights and mineral-bearing land, allowing states to collect back taxes from April 1, 2005, without interest or penalties. Odisha anticipates substantial gains following this Supreme Court ruling, as the state presently collects around Rs 50,000 crore annually from the mining industry.

The new law arrives two decades since the BJD-BJP coalition government introduced the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act in 2004 to tax mines and mineral-bearing land. However, the law was overturned by the Orissa High Court in December 2005, and the issue remains before the Supreme Court.