Centre Launches ₹5,000 Crore Mining Reform Incentive Scheme

The Centre launched a ₹5,000 crore incentive scheme on 24 April 2026 for states and Union Territories with legislatures under the fiscal year 2026-27 framework. The scheme is linked to mining sector reforms, mine operationalisation, and mineral production, and it is placed under the Scheme for Special Assistance to States for Capital Investment (SASCI).

Scheme Framework

The Ministry of Mines is the nodal ministry for the scheme and has issued operational guidelines for implementation. The incentive mechanism builds on a similar initiative from the previous fiscal year and is designed for states with legislatures.

Mining Reforms Under The Scheme

• States can receive ₹100 crore by 15 December 2026 for completing five specified mining reforms.
• The five reforms include integration with the Unified Mining Portal.
• The five reforms include setting up a pre-auction committee.
• The five reforms include forming a state-level coordination committee.
• The five reforms include publishing an annual auction calendar.
• The five reforms include adopting technology to prevent mineral ore grade misclassification.

Incentives For Auction And Production

States can receive ₹20 crore per major mineral block for successful auctions with pre-embedded clearances during FY27 up to 31 December 2026. The incentive for this component is capped at ₹200 crore per state. States can also earn an additional ₹250 crore by operationalising at least 10% of major mineral blocks auctioned until 31 March 2026, if production and dispatch begin before 31 December 2026.

State Mining Readiness Index

Performance under the State Mining Readiness Index 2026-27 will also be rewarded. The top three states in each of three categories will receive ₹100 crore, ₹75 crore, and ₹50 crore, respectively.

Mining Sector Context

Mining in India is governed by the Mines and Minerals (Development and Regulation) Act, 1957. Major minerals and minor minerals are classified under Indian mining law, and mineral auctions are used for allocation of mineral concessions in several states.