Kerala CM warns mineral tax curbs threaten state fiscal autonomy

The Kerala Chief Minister raised concerns over proposed amendments to the Mines and Minerals (Development and Regulation) Act, warning that restrictions on state taxation powers could undermine fiscal federalism in India.

Satheesan flagged that the proposed changes would limit states' ability to impose taxes and levies on mineral rights and mineral-bearing lands, effectively eroding their fiscal autonomy. The restrictions, he argued, would weaken the constitutional framework that grants states the power to generate independent revenue through mineral extraction activities.

The Chief Minister's statement reflects growing apprehension among state governments over centralization of mineral taxation policies. States have historically depended on mineral-related revenues as a significant source of income for development and welfare programmes.

The proposed amendments to the MMDR Act are expected to centralize certain regulatory aspects of mineral extraction. However, the impact on state revenues remains a contentious issue, with state administrations seeking clarity on how fiscal powers will be protected under the new framework.

The issue is likely to be raised in inter-state forums and discussions with the central government, as states vie to protect their constitutional prerogatives in matters of resource taxation.