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

On the same day that Parliament approved the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, Naveen Patnaik, the leader of the opposition in Odisha, expressed apprehensions over the draft legislation. Patnaik, a former chief minister of the state, labeled the law as a "violation of the state's financial rights" and warned it posed a "grave threat to Odisha's fiscal autonomy and constitutional entitlements" to its natural resources.

He stated in a letter to Odisha Chief Minister Mohan Charan Majhi that provisions in the Bill would unfavorably affect mineral-rich states like Odisha, resulting in significant revenue losses and hindering its developmental plans.

The BJD president requested an all-party meeting to reach a mutual decision on preserving Odisha's federal rights and mineral revenues. He urged a special Assembly session to pass a consensus resolution opposing the new MMDR Act and to protest the federal government's "appropriation of state powers".

Patnaik clashed with the amendments, including the widening of Union control under Section 2 to encompass "mineral-bearing lands" alongside the regulation of mines. He objected to the provision that expressly forbids state governments from imposing taxes, cesses, or similar levies on mineral rights or mineral-bearing lands, as well as the amendment granting the Central government exclusive authority to establish rules restricting states' ability to levy taxes on minerals.

He emphasized that Odisha's natural wealth belongs to its citizens, and revenue from mining operations is essential for funding healthcare, education, social welfare programs, and infrastructure development.

Patnaik emphasized that fiscal autonomy is a constitutional principle integral to the federal system, and the Bill undermines a crucial aspect of the Centre-State relationship, pushes India's federal structure in a regressive direction, and threatens the foundation of cooperative federalism. He argued that if the Central Government takes away Odisha's authority over mineral-bearing lands and its right to levy cesses, the state would solely face pollution, displacement, and the burden of mining, while benefiting none of its people.

Odisha holds a strong position on the issue, as the Supreme Court in July 2024 upheld the state's authority to levy taxes on mineral rights and mineral-bearing land. The court also permitted states to collect tax arrears from April 1, 2005, without incurring interest or penalties. Odisha anticipates substantial gains from the Supreme Court's decision, with the state earning approximately Rs 50,000 crore annually from the mining sector following the enactment of the Orissa Rural Infrastructure and Socio-Economic Development (ORISED) Act in 2004.