BJP seeks Presidential intervention on Odisha royalty amendment

The Bharatiya Janata Party (BJP) in Odisha has written to the President of India seeking intervention to overturn a provision of the Mines and Minerals (Amendment) Act, 2026, that it says could deprive the state of billions of rupees in revenue. The party’s state unit, led by former minister and senior leader Pradipta Kumar Naik, argues that the amendment, which came into force on 1 January 2027, creates a fiscal cliff for Odisha by altering the formula used to calculate mineral royalties and by imposing a retrospective tax on existing leases. The BJP claims the changes could cost the state more than ₹1 lakh crore in arrears and strip away an anticipated annual inflow of around ₹12 000 crore.The contested clause, Section 5(3) of the amendment, replaces the earlier “base price plus royalty” model with a “gross revenue share” framework..

Under the new system, the state’s share of mineral sales is capped at a fixed percentage of the gross turnover of mining companies, irrespective of the market price of the minerals extracted. The BJP maintains that this shift will disproportionately affect low‑grade ore mines that operate on thin margins, forcing them to either shut down or renegotiate leases at terms less favourable to the state. The party points to a detailed financial impact assessment prepared by a consultancy firm, which estimates that the cumulative loss in royalty receipts could exceed ₹1 lakh crore over the next decade.In addition to the royalty concerns, the amendment introduces a retrospective levy on royalties already paid under the previous regime..

The BJP alleges that this retroactive provision contravenes the principle of legal certainty and could expose mining firms to a flood of litigation. The party’s letter to President Droupadi Murmu, who hails from Odisha, urges the office to use its constitutional powers to suspend the amendment until a comprehensive review is undertaken. The BJP also calls for a dialogue involving the central Ministry of Mines, the state government, and industry stakeholders to craft a more balanced fiscal structure.The Odisha state government, led by Chief Minister Naveen Patnaik of the Biju Janata Dal (BJD), has defended the amendment as necessary to align state revenue with the soaring market prices of iron ore, copper and other minerals..

In a statement issued on Tuesday, the Patnaik administration said the new formula would ensure that the state receives a fairer share of the windfall profits generated by private mining houses, many of which have reported record earnings in the past two years. The government also highlighted that the amendment was passed after extensive consultations with the Ministry of Mines and the Securities and Exchange Board of India, and that it complies with existing statutes governing mineral revenue.Industry bodies have expressed mixed reactions. The Federation of Indian Mineral Industries (FIMI) welcomed the move, arguing that the amendment could promote transparency by linking royalties directly to sales revenue, thereby reducing opportunities for under‑reporting..

Conversely, the Confederation of Indian Industry (CII) warned that the retrospective element could deter investment in the sector, particularly in a climate already marked by global commodity price volatility. Several major mining companies operating in Odisha, including Vedanta Ltd and Tata Steel, have requested clarification on the implementation timeline and have signalled that they may seek legal recourse if the amendment is not rolled back.Legal experts note that the President’s role in such matters is largely ceremonial, with the power to promulgate ordinances or refer legislation to the Supreme Court under Article 111 of the Constitution. Professor Arvind Kumar of the National Law School, Bangalore, said that while the President can exercise discretion in exceptional cases, any direct intervention would likely require a formal request from the Union government..

He added that the central government, which holds the prerogative to amend the Mines and Minerals Act, has not publicly commented on the BJP’s appeal, suggesting a possible reluctance to engage in a politically sensitive dispute.The BJP’s move comes at a time when the state is grappling with a budget shortfall exacerbated by the COVID‑19 pandemic and recent natural disasters. The party warns that the projected loss of ₹12 000 crore in annual revenue could force the state to defer critical infrastructure projects, including road expansions, power plant upgrades and water supply schemes. It also argues that the fiscal strain could impact social welfare programmes such as the Biju Swasthya Kalyan Yojana, which provides health coverage to millions of residents.Opposition parties in the Odisha Legislative Assembly have seized upon the issue to critique both the state and central governments..

The Indian National Congress, which holds a modest number of seats, has called for a parliamentary committee to examine the amendment’s implications for federal fiscal relations. Meanwhile, the BJD has dismissed the BJP’s allegations as “politically motivated” and warned that any attempt to overturn a democratically enacted law could set a dangerous precedent for state‑central cooperation on natural resource management.Analysts suggest that the dispute may ultimately be resolved through negotiations rather than constitutional intervention. A senior official in the Ministry of Mines, speaking on condition of anonymity, indicated that the central government is open to “reasonable adjustments” that address the concerns of both the state and the mining sector, provided they do not compromise the overarching goal of equitable revenue distribution..

The official also noted that the ministry is preparing a detailed impact study, which will be presented to the inter‑governmental committee on minerals later this month.As the debate unfolds, the eyes of investors, policymakers and the public remain fixed on Odisha’s mineral wealth, which accounts for a significant share of India’s iron ore and bauxite output. The outcome of the President’s potential involvement, or lack thereof, could shape the fiscal landscape of the state for years to come, influencing not only revenue streams but also the broader narrative of resource governance in a federal system..