To mitigate the impact of steep state taxes on mining operations, the Centre plans to hold consultations with state governments to develop measures that prevent the excessive burden on the mining industry. This initiative comes in response to a Supreme Court ruling allowing states to impose additional taxes on mining within their territories.
Following this verdict, states like Karnataka have introduced new levies on mining, aiming to raise around ₹4,700 crore in additional revenue. This has sparked concerns within the mining sector, which fears a domino effect of increased taxes from other states, significantly inflating their input costs.
State governments currently hold the authority to approve most mining operations. A senior official mentioned that the consultations would address high taxation issues affecting domestic mining and the delayed operationalization of mining leases. Discussions will also include improving the turnaround time of auctioned mines, enhancing critical mineral exploration, and integrating artificial intelligence in mining processes.
According to officials, the meeting is expected to be held in the latter half of January 2025.
Official estimates indicate that only 50 out of 435 mineral blocks auctioned since the 2015 auction regime have been operationalized as of November 2024. Despite this, the post-auction regime has seen state revenues multiply significantly, as Union Mines Minister G Kishan Reddy noted.
