Bhubaneswar: Koraput MP Saptagiri Ulaka has written to Prime Minister Narendra Modi expressing strong opposition to Section 9D of the Mines and Minerals (Development and Regulation) Amendment Act, 2026.
In his letter dated 31 August 2026, Ulaka warned that the provision threatens the constitutional rights, fiscal autonomy and long-term interests of mineral-bearing states such as Odisha.
Ulaka said the public debate after the legislation has been wrongly reduced to whether Odisha will continue receiving nearly 90 per cent of mining revenues. “This does not address the fundamental issue. The real question is not merely how much revenue Odisha receives today, but who will possess the constitutional authority to determine and raise revenue from Odisha’s mineral wealth tomorrow,” he wrote.
Section 9D states that a state government cannot impose any tax, cess or other levy on mineral rights or mineral-bearing lands except in accordance with conditions or restrictions prescribed by the Central government.
Ulaka argued that royalty, auction premiums and District Mineral Foundation (DMF) contributions are only statutory revenue streams and cannot replace the independent legislative powers assigned to states under the Constitution.
He cited the nine-judge Constitution Bench judgment of the Supreme Court in Mineral Area Development Authority v. Steel Authority of India (2024). By an 8:1 majority, the court held that royalty is not a tax and recognised the legislative competence of state legislatures to tax mineral rights under Entry 50 of List II, subject to limitations imposed by Parliament by law. It also recognised the distinct constitutional field of taxation of mineral-bearing lands under Entry 49 of List II.
“The insertion of Section 9D is, therefore, not merely an administrative clarification. It substantially restricts the taxation space available to States after the constitutional position was authoritatively clarified by the Supreme Court,” Ulaka stated.
The assurance that approximately 90 per cent of existing mining revenues will remain with states does not resolve the concern. Odisha may continue to receive royalty, auction premiums and DMF contributions while losing the practical freedom to design future taxes or levies according to its developmental, environmental and social requirements. Continuation of existing receipts cannot be equated with preservation of fiscal autonomy.
Industrial competitiveness and price stability are legitimate national concerns, he noted. However, the possibility that a constitutional power may be exercised imprudently cannot justify making its exercise dependent upon conditions prescribed exclusively by the Union executive. Such concerns should instead be addressed through transparent consultation, objectively defined statutory safeguards and an institutional federal mechanism involving mineral-bearing states.
At the same time, Ulaka stressed that Odisha’s constitutional rights cannot be defended credibly without acknowledging the serious failures in the governance of its mineral resources during the previous state government’s 24-year tenure.
He referred to the Justice M.B. Shah Commission, which documented the grave scale of illegal extraction of iron and manganese ore in Odisha and reportedly assessed violations involving approximately ₹59,200 crore. In Common Cause v. Union of India (2017), the Supreme Court directed recovery of the full value of minerals unlawfully extracted without the required statutory clearances. Subsequent audits and assessments have raised serious questions regarding unrecovered dues, extraction beyond approved limits, alleged misclassification and undervaluation of ore, and illegal extraction of minor minerals. Those who administered the state during this period must answer for these failures, he said.
The record of DMF expenditure is equally concerning. CAG findings reportedly identified expenditure of ₹983.32 crore on 9,739 projects in 976 villages not classified as mining-affected in Keonjhar and Sundargarh, even as several affected villages received no projects. Questions were also raised regarding inadmissible infrastructure and administrative expenditure, substitution of other government liabilities, and incomplete or non-functional projects.
DMF funds exist for communities that bear the consequences of mining—displacement, polluted water, degraded forests, damaged livelihoods and pressure on local infrastructure. Their diversion or ineffective utilisation denies justice to the very people in whose name mineral-led development is justified, Ulaka pointed out.
The record concerning tribal land rights, Gram Sabha consent and rehabilitation also requires scrutiny. Audit findings relating to Scheduled Areas have reportedly identified instances where procedures under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the Panchayats (Extension to Scheduled Areas) Act, 1996, were bypassed or inadequately followed. Many communities displaced by mining and industrial projects continue to await proper rehabilitation, Records of Rights, employment and compensation.“Higher mineral revenues cannot erase these failures,” he wrote.
Ulaka emphasised that Odisha’s mineral wealth cannot come at the cost of states’ constitutional rights, fiscal autonomy or tribal communities. He demanded parliamentary scrutiny, federal consultation and accountability.
In light of these issues, the MP has urged the Union government to:
- Reconsider Section 9D and ensure that the constitutional taxation space of mineral-bearing states is not reduced to a power exercisable only under conditions determined by the Union executive.
- Refer the provision to an appropriate Parliamentary Committee for detailed examination of its constitutional, fiscal, industrial, environmental and federal implications.
- Initiate formal consultations with all mineral-bearing states before prescribing conditions or restrictions, and establish a statutory consultative mechanism involving the Union, states, tribal communities and independent constitutional and financial experts.
- Publish a state-wise fiscal-impact assessment detailing the amendment’s implications for existing revenues, pending demands, future taxation powers and mining-affected districts.
- Order an independent, time-bound review of illegal mining dues, revenue leakages and DMF expenditure in Odisha, with district-wise disclosure of amounts assessed, recovered, pending and utilised.
Ulaka, who represents the predominantly tribal Koraput constituency, underlined that communities living above immense natural resources continue to face poverty, inadequate public services, displacement and insecurity over their land and forest rights, even as minerals extracted from Odisha support industries and infrastructure across the country.
