Centre Unveils Rs 5,000 Crore Incentive to Boost Mining Reforms Across States

Centre Launches New Incentive Framework to Accelerate Mining Sector Reforms

The Centre has unveiled a new incentive framework aimed at accelerating reforms in the mining sector, allocating Rs 5,000 crore under the Scheme for Special Assistance to States for Capital Investment (SASCI) for the financial year 2026-27. This move is seen as a significant step to encourage mining sector reforms in states.

The Ministry of Mines has confirmed that operational guidelines for this component have been issued, outlining the framework's purpose. The scheme is designed to speed up the operationalisation of mines, boost mineral output, strengthen state revenues, and improve governance standards across the sector. Incentives will be extended to states and Union Territories with legislatures, structured across three specific reform pillars.

Reform Pillars and Incentives

Read also: Google to Commit $10 Billion to Anthropic, with Additional $30 Billion Allocated for AI-Related Objectives

The first reform category focuses on implementation measures, requiring states to complete five key actions by December 15, 2026, to qualify for Rs 100 crore. The second reform track rewards performance in auctioning and operationalising mineral blocks, with states eligible for Rs 20 crore per successfully auctioned block and capped at Rs 200 crore per state. The third component is linked to the State Mining Readiness Index (SMRI) 2026-27, with the top three states in each category receiving rewards ranging from Rs 100 crore to Rs 50 crore.

According to the ministry, the broader objective is to facilitate and expedite mine operationalisation while enhancing efficiency and accountability in the mining ecosystem. The operational guidelines for this component have already been issued, and the Centre is now awaiting the implementation of these reforms.