Kerala CM writes to PM Modi against mining law changes

Thiruvananthapuram, Aug 17 (IANS) Chief Minister V.D. Satheesan on Monday wrote to Prime Minister Narendra Modi seeking an urgent review of the amendments to the Mines and Minerals (Development and Regulation) Act, warning that the changes could curtail the constitutional and fiscal powers of States and hit Kerala’s revenue interests.

Satheesan has particularly objected to the proposed Section 9D, under which the power to levy tax, cess and other charges on land containing mineral deposits would be made subject to criteria prescribed by the Central government.

Such a provision, he argued, would directly impinge on the constitutional powers of the States.

The Bill also contains provisions to bring land with mineral deposits under the Centre’s regulatory ambit and to extinguish outstanding State tax liabilities, he said.

The Chief Minister warned that the proposed changes could have serious financial implications for Kerala, which has significant mineral resources.

Any restriction on the State’s fiscal powers over mineral-bearing land would affect not only State revenue but also the tax income of local self-government institutions, he said.

Seeking Prime Minister Modi’s immediate intervention, Satheesan urged the Centre to reconsider provisions that Kerala believes could weaken the financial autonomy of States.

The Chief Minister also invoked the 2024 Supreme Court judgment on mining rights, arguing that the ruling had clearly distinguished royalty from tax.

The court had held that royalty payable for mining rights was not a tax, he pointed out.

Satheesan said Entry 50 of List II of the Seventh Schedule of the Constitution gives States the power to impose taxes on mineral rights, subject to the constitutional framework.

He further pointed out that the Supreme Court had recognised the States’ power under Entry 49 of List II to levy taxes on land containing mineral resources, based on the quantity or value of mineral production.

The proposed amendments, therefore, risk undermining powers already recognised as belonging to the States under the Constitution, Satheesan contended.

The Chief Minister’s intervention comes at a time when the Centre-State relationship over fiscal powers has emerged as a contentious issue.

Kerala’s principal concern is that any transfer of control over mineral-bearing land or dilution of State taxation powers could create a new revenue challenge for the State as well as local governments.

Satheesan has sought the Prime Minister’s urgent intervention to address Kerala’s concerns and ensure that the State’s constitutional and fiscal powers are protected.

–IANS

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