Why In News?
Following the Supreme Court's ruling on mineral taxation, economists advocated replacing India's fragmented mining levies with a unified model to prevent inter-state trade distortions and boost state revenues.
What is Mining?
Mining is the process of extracting valuable non-renewable mineral resources, fossil fuels, metals, and geological materials from the Earth's crust for industrial manufacturing, energy generation, and infrastructure development.
Mining contributes approximately 2.2% to 2.5% of India's Gross Domestic Product (GDP) and forms the raw material foundation for critical core industries including power, steel, fertilizers, and defense.
Classification under Mines and Minerals (Development and Regulation) Act 1957
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Major Minerals: Governed by the Central Government (e.g., Coal, Iron Ore, Bauxite, Manganese, Rare Earth Elements, Lithium).
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Minor Minerals: Governed entirely by State Governments under Section 15 of MMDR Act (e.g., Building stones, Gravel, Ordinary clay, Sand).
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Critical and Strategic Minerals: 24 notified minerals vital for clean energy transition, aerospace, and high-tech manufacturing, where the Centre conducts auctions under the MMDR Amendment Act, 2023.
About Mining Taxation in India
Royalty: A statutory charge paid by the mine leaseholder to the mineral owner (the State) as consideration for extracting and depleting non-renewable mineral reserves.
Dead Rent: A fixed minimum annual fee payable by the leaseholder if the mine remains unworked or if royalty falls below a specified threshold.
District Mineral Foundation (DMF): A statutory non-profit trust established in every mining district under Section 9B of the MMDR Act to fund socio-economic development and environmental remediation for mining-affected communities.
National Mineral Exploration Trust (NMET): A dedicated central trust funded by a 2% royalty surcharge to finance baseline regional and deep-seated mineral exploration.
Auction Premium: The percentage of dispatch value quoted by winning bidders in competitive mineral block auctions introduced under the 2015 MMDR reforms.