States will not lose even a single rupee due to MMDR amendment: Kishan Reddy

New Delhi: Allaying concerns that state governments could lose revenue from cess and taxes in the coal and minerals sector because of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, Coal and Mines Minister G Kishan Reddy said on Thursday, August 13, that states will not lose even a single rupee because of the new legislation. Addressing the media, the minister said the Bill is aimed at levelling the playing field ahead of the launch of the coal exchange and the mineral exchange.

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"The Bill had to be introduced before Parliament because imposition of additional taxes by state governments was causing prices of coal and major minerals to rise in certain states more than others. If coal prices in one state increases and it is lower in another state, companies will move from the first state to the second one,” he said, adding that similar concerns applied to iron ore and steel. "The legislation will create a level playing field across the country for coal and important minerals that are required for nation-building," said Reddy.

He also said the Centre was seeking to regulate major minerals such as coal, limestone, iron ore, copper and manganese, while states would retain powers over 49 minor minerals. "Coal is crucial for power generation, as 73 percent of India's electricity generation comes from coal," said the minister.

Import substitution

Stressing the government's objective of achieving import substitution in both coal and major minerals, Reddy said the new legislation will lead to an increase in production, better utilisation of existing evacuation infrastructure and import substitution. "Coal imports continue because of the lower grade of domestic coal. So, if domestic coal prices increase, there will be more imports," he said.

Additional Coal Secretary Sanoj Kumar Jha said, "Import of coal would have gone up if taxes imposed by states had continued as is. There was no way that domestic coal could have competed with imported coal going forward."

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No hit to state governments' revenues: Reddy

The minister said the legislation will have no impact on state governments' revenues. He said the share of states' revenue in the coal and minerals sector has gone up from 65 percent in 2014-15 to 85 percent currently.

"After the arrival of Prime Minister Narendra Modi, we are working with full commitment to strengthen state governments and states financially. If we take the example of the coal and mineral sectors, in 2014-15, the state's revenue was Rs 13,258 crore. Today, the state's revenue is Rs 71,035 crore. Today, the share of the state has increased from 65 percent to 85 percent."

"Similarly, if you look at the coal sector's revenue, the coal sector's revenue in 2014-15 was Rs 11,848 crore. Today, the coal sector's revenue has increased to Rs 58,592 crore," the minister told the media.

Guidelines on state levies soon: Reddy

Under the new legislation, the government will have to lay down terms and conditions for state levies. While asserting that it will be a consultative process, Reddy said the ministry will issue guidelines for the same soon.

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