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Centre Unveils Rs 5,000 Crore Mining Reform Incentive for States

The Centre has introduced a Rs 5,000 crore incentive mechanism under the SASCI scheme for FY 2026-27 to push mining reforms in states. The scheme aims to expedite mine operationalisation, increase mineral production, and enhance state revenue collection from the mining sector. Incentives are provided across three reform areas: implementation of mining reforms, successful auctioning of mineral blocks, and performance under the State Mining Readiness Index. States must complete specific reform actions by December 15, 2026, to be eligible for the incentives.

Key Points: Centre's Rs 5,000 Cr Mining Reform Incentive for States

  • Rs 5,000 crore incentive for mining reforms in states
  • Three reform areas: implementation, auctioning, and SMRI-based rewards
  • States must complete five reform actions by Dec 15, 2026 for Rs 100 crore
  • Up to Rs 200 crore per state for successful block auctioning with pre-embedded clearances
2 min read

Centre introduces Rs 5,000 crore incentive scheme under SASCI to push mining reforms in states

Centre introduces Rs 5,000 crore incentive under SASCI to boost mining reforms, mine operationalisation, mineral production, and state revenue.

"This is a significant step to encourage mining sector reforms in states. - Ministry of Mines"

New Delhi, April 24

The government on Friday incorporated an incentive mechanism on mining sector reforms with Rs 5,000 crore outlay in the Scheme for Special Assistance to States for Capital Investment for FY 2026-27.

According to an official press release issued by the Ministry of Mines, the operational guidelines for this scheme component have been issued recently by the said ministry. This is a significant step to encourage mining sector reforms in states.

The objective of this SASCI scheme component is to facilitate and expedite mine operationalisation, increase mineral production, enhance revenue collection by States from the mining sector, and improve overall governance of the mining sector.

Under the scheme, incentives will be provided to states and Union Territories with legislatures across three reform areas.

Implementation of Mining Reforms viz. integration of the State with the Unified Mining Portal of the Ministry of Mines for mine operationalization, constitution of a Pre-Auction Committee to actively resolve land scheduling issues, constitution of a State-level Coordination Committee for regular monitoring of operationalization of mines, annual auction calendar for major minerals & adherence to the same to the extent possible, and adoption of technology-based measures to prevent or detect grade misclassification of mineral ore. A State has to undertake all the above five reform actions by 15.12.2026, upon which it will be eligible for the incentive money of ₹100 crore.

The second reform area concerns with incentivizing states for successful auctioning of major mineral blocks with pre-embedded clearances (such as forest, environment, land, etc.) in FY 2026-27 upto 31.12.2026 (₹20 crore per block successfully auctioned, with an upper cap of ₹200 crore per State) and operationalization (i.e. commencement of production and dispatch) during FY 2026-27 (up to 31.12.2026) at least 10% of the major mineral blocks successfully auctioned till 31.03.2026 (₹250 crore per State).

The third component focuses on SMRI-based Reforms. Rewarding the top three States in each of the three categories A, B, and C under the State Mining Readiness Index (SMRI) 2026-27, to be released by the Ministry of Mines (₹100 crore, ₹75 crore and ₹50 crore for securing 1st, 2nd and 3rd position under each category).

- ANI

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Reader Comments

S
Sneha F
Good move by the government. But I hope the pre-embedded clearances for forest and environment are handled carefully. We can't compromise on ecological balance just for mining. Need strict monitoring.
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Nikhil C
The Unified Mining Portal integration is long overdue. State governments often delay mine operationalization due to red-tapism. This incentive will force them to act faster. Kya baat hai! 👍
J
James A
Interesting policy. I'm curious how the SMRI ranking will be calculated fairly across different categories. Some states have naturally more mineral wealth so they might have an advantage. Need transparency in this index.
T
Tanya I
I appreciate the focus on technology to prevent grade misclassification. This has been a major loophole leading to revenue loss for states. But what about local communities affected by mining? Their rehabilitation should also be a priority.
A
Arjun K
Desh ke liye bahut acchi scheme hai. Mineral production badhega toh economy ko boost milega. States ko bhi revenue milega jo development mein lagega. But 2026 ka deadline realistic hai? Administration ko time lagega reforms implement karne mein.
S
Sarah B
A 100 crore incentive for reforms? That's a good carrot.

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