Kerala Chief Minister V.D. Satheesan on Monday, 17 August wrote to Prime Minister Narendra Modi seeking an urgent review of the proposed amendments to the Mines and Minerals (Development and Regulation) Act, warning that the changes could curtail the constitutional and fiscal powers of states and deal a serious blow to Kerala's revenue interests.

The Core Objection: Section 9D

Satheesan has specifically flagged the proposed Section 9D, which would make the power to levy tax, cess, and other charges on land containing mineral deposits subject to criteria prescribed by the Central government. He argued that such a provision would directly impinge on the constitutional powers of states to govern their own fiscal affairs.

The Bill also reportedly contains provisions to bring mineral-bearing land under the Centre's regulatory ambit and to extinguish outstanding state tax liabilities — a combination that Kerala views as a multi-pronged erosion of state authority.

Constitutional Backing Cited

Satheesan invoked Entry 50 of List II of the Seventh Schedule of the Constitution, which grants states the power to impose taxes on mineral rights within the constitutional framework. He also cited Entry 49 of List II, under which the Supreme Court has recognised states' power to levy taxes on mineral-bearing land based on the quantity or value of mineral production.

Crucially, the Chief Minister referenced the 2024 Supreme Court judgment on mining rights, which had clearly distinguished royalty from tax and held that royalty payable for mining rights does not constitute a tax. Satheesan argued that the proposed amendments risk undermining powers already recognised as belonging to states under the Constitution.

Revenue Impact on Kerala

Kerala's concern is not merely constitutional — it is also fiscal. The Chief Minister warned that any restriction on the state's authority over mineral-bearing land would affect not only state revenue but also the tax income of local self-government institutions. Kerala, which has significant mineral resources, stands to face a compounded revenue challenge if both state and local-body income streams are affected.

Broader Centre-State Context

The Chief Minister's letter comes at a time when fiscal federalism has emerged as a flashpoint in Centre-State relations. Several non-Bharatiya Janata Party (BJP) states have in recent months raised concerns about what they describe as an incremental centralisation of financial powers. Kerala's intervention adds to a growing chorus demanding that the Union government respect the constitutional division of fiscal authority.

Satheesan has urged Prime Minister Modi to intervene urgently to reconsider the provisions and ensure that Kerala's constitutional and fiscal powers are protected. Whether the Centre will engage with these concerns before the amendments are tabled remains to be seen.