Consider the following statements: Statement I: In India, State Governments have no power for making rules for grant of concessions in respect of extraction of minor minerals even though such minerals are located in their territories. Statement II: In India, the Central Government has the power to notify minor minerals under the relevant law. Which one of the following is correct in respect of the above statements?

Updated 11 Apr 2026 · From UPSC Prelims GS Paper I 2025, Q69

Contents17
UPSC Prelims GS2025Indian Polity
  1. ABoth Statement I and Statement II are correct and Statement II explains Statement I
  2. BBoth Statement I and Statement II are correct but Statement II does not explain Statement I
  3. CStatement I is correct but Statement II is not correct
  4. DStatement I is not correct but Statement II is correct
Show answer

Answer: (D) Statement I is not correct but Statement II is correct

Statement I: 'State Governments have no power to make rules for minor mineral concessions' — INCORRECT.

Under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957, State Governments DO have the power to make rules for regulating the grant of quarry leases, mining leases, and other concessions for minor minerals.

In fact, minor minerals are primarily under state jurisdiction.

States set royalty rates, grant/refuse mining permits, and regulate extraction of minor minerals like sand, gravel, building stones, etc.

Statement II: 'Central Government has the power to notify minor minerals' — CORRECT.

Under Section 3(e) of the MMDR Act, the Central Government has the authority to declare/notify which minerals are classified as 'minor minerals' (as opposed to major minerals).

Once a mineral is notified as a minor mineral by the Centre, its regulation falls primarily to the state governments.

The distinction between major and minor minerals is made by the Central Government through notification.

Statement I is not correct, Statement II is correct. Answer is (d).

Why this was asked

Minor minerals like sand, gravel, and building stones generate significant revenue for state governments and are crucial for construction industry regulation.

The question tests the federal division of powers - Centre decides what constitutes a minor mineral, but states regulate their extraction and grant concessions.

UPSC is checking if students understand that mineral classification (Centre) and mineral regulation (State) are separate powers under the MMDR Act 1957.

Minor Minerals Regulation by States

Indian Polity minor minerals State Governments grant of concessions extraction

Minor Minerals: State Government Powers & Regulation

Must know

State Governments have full power to make rules for minor mineral concessions under Section 15 of MMDR Act 1957

States control quarry leases, mining leases, royalty rates for minor minerals like sand, gravel, building stones

Minor minerals are primarily under state jurisdiction - not central control

Good to know

States can grant or refuse mining permits for minor minerals in their territory

Under the Mines and Minerals (Development and Regulation) Act, 1957, minor minerals fall primarily under state jurisdiction. Section 15 specifically empowers state governments to regulate extraction and grant concessions.

State Powers Over Minor Minerals

Power

Legal Basis

Examples

Key Feature

Rule-making for concessions

Section 15, MMDR Act

Quarry lease rules, mining lease procedures

Complete regulatory authority

Royalty rate setting

State notification

Sand mining rates, gravel extraction fees

Revenue goes to state

Grant/refuse permits

State mining department

Environmental clearance, lease approval

Discretionary power

Regulation of extraction

State rules

Quantity limits, area restrictions, timing

Local control

What States Regulate

Sand, gravel, ordinary clay - most common minor minerals under state control

Building stones, limestone (when used for building) - state jurisdiction for local construction

Brick earth, fuller's earth - industrial minor minerals regulated by states

Kankar, murrum - road construction materials under state mining laws

Exam traps

Trap: Statement I says states have no power - this is completely wrong, states have primary power

Confusion: Don't mix minor minerals (state) with major minerals (central) - coal, iron ore are central

Federalism trap: Minor minerals are state subject under List II, not concurrent or union list

Revenue trap: Royalty from minor minerals goes to states, not Centre

Central Power to Notify Minor Minerals

Indian Polity Central Government notify minor minerals relevant law

Central Government's Notification Power Under MMDR Act

Must know

Central Government has exclusive power to classify and notify minor minerals under Section 3(e) of MMDR Act

Classification authority rests with Centre - states cannot decide what is minor mineral

Once notified as minor mineral, regulation shifts to states - clear division of powers

Constitutional Logic

The Centre decides what constitutes a minor mineral (classification), while states decide how to regulate them (implementation). This creates a clear federal division without overlap.

Notification Process

%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
  s1["`****Central Government** identifies mineral**
Based on economic importance, strategic value, extraction complexity`"]
  s2["`****Section 3(e)** notification issued**
Official gazette notification declaring mineral as 'minor'`"]
  s3["`****State jurisdiction** activated**
States can now make rules and grant concessions for this mineral`"]
  s4["`****State regulation** begins**
Quarry leases, royalty rates, environmental norms set by state`"]
  s1 --> s2
  s2 --> s3
  s3 --> s4

Major vs Minor Mineral Classification

Aspect

Major Minerals

Minor Minerals

Authority

Classification power

Central notification

Central notification

Centre decides both

Regulation after classification

Central/concurrent

State jurisdiction

Different levels

Examples

Coal, iron ore, petroleum

Sand, gravel, building stone

Based on strategic importance

Royalty collection

Central rates

State rates

Revenue follows regulation

Exam traps

Correct understanding: Centre classifies (what is minor), states regulate (how to mine)

Don't assume: States cannot decide on their own what counts as minor mineral

Key distinction: Notification power ≠ Regulation power - Centre has first, states have second

Federal balance: Both statements in question test this Centre-State division of powers

MMDR Act 1957 Federal Framework

Indian Polity MMDR Act Mines and Minerals Development and Regulation

MMDR Act 1957: Centre-State Division in Mining

Must know

MMDR Act 1957 creates federal framework for mining with clear Centre-State division

Section 3(e) gives Centre classification power, Section 15 gives states regulation power

Good to know

Act balances national mineral policy (Centre) with local regulation needs (States)

Federal Design

The MMDR Act 1957 reflects constitutional federalism in mining - the Centre sets broad policy and classifications, while states handle day-to-day regulation and revenue collection. This prevents both central overreach and state-level inconsistency.

MMDR Act Powers Distribution

# MMDR Act 1957
## **Central Powers**
- Classify major/minor minerals (Sec 3e)
- National mineral policy
- Strategic mineral control
- Inter-state mining disputes
## **State Powers**
- Mining lease rules (Sec 15)
- Royalty rate setting
- Environmental clearances
- Quarry lease grants
## **Shared Aspects**
- Forest clearances
- Tribal area consultations
- Environmental impact
- Revenue sharing

Key MMDR Act Sections

Section

Power

Authority

Scope

Section 3(e)

Define minor minerals

Central Government

Classification through notification

Section 15

Make rules for minor minerals

State Governments

Lease procedures, concessions, royalty

Section 9

Grant mining leases

State/Centre based on mineral type

Major minerals need central approval

Section 9A

Royalty rates

Central rates for major, State rates for minor

Revenue collection mechanism

Constitutional Basis

Entry 23, List II (State List) - 'Regulation of mines and mineral development' gives states primary role

Entry 54, List I (Union List) - 'Regulation of mines and mineral development by Union' for strategic minerals

Concurrent oversight through environmental laws, forest laws, tribal protection laws

7th Schedule balance - prevents both excessive centralization and regulatory chaos

Exam traps

Section confusion: Don't mix Section 3(e) (central classification) with Section 15 (state rules)

Authority trap: State can regulate but cannot classify - classification is central prerogative

Revenue misunderstanding: Minor mineral royalty goes to states, major mineral royalty has central component

Federal balance: Act shows cooperation federalism - both levels have defined, non-overlapping roles

Centre-State Relations in Mining Sector

Indian Polity

Federal Structure of Mining: Centre-State Coordination

Must know

Mining federalism follows constitutional division - states regulate locally, Centre handles strategic minerals

Cooperative model - Centre sets policy framework, states implement through local knowledge

Good to know

Revenue follows regulation - whoever regulates gets primary revenue share

Federal Balance

India's mining sector exemplifies cooperative federalism - the Centre maintains strategic oversight while states retain operational control. This balance prevents both central micromanagement and state-level inconsistency in mineral policy.

Mining Powers: Centre vs States

Aspect

Central Government

State Government

Rationale

Strategic minerals

Full control (coal, petroleum)

Implementation support

National security, energy policy

Minor minerals

Classification only

Complete regulation

Local knowledge, revenue needs

Environmental clearance

Category A projects

Category B projects

Impact-based division

Forest clearance

Reserved forests

State forests

Constitutional forest powers

Tribal consultation

Policy framework

Ground-level implementation

Local community knowledge

Why This Division Works

Local expertise - States understand geological conditions, environmental impacts, community needs better

Revenue incentive - States that regulate also earn revenue, creating accountability for sustainable mining

Strategic control - Centre retains control over minerals critical for national security and energy

Administrative efficiency - Reduces bureaucratic delays by keeping routine decisions at state level

Exam traps

Federal misunderstanding: Minor minerals are not centrally controlled - they're state subject after classification

Revenue confusion: States get royalty from minerals they regulate - creates fiscal federalism

Policy vs implementation: Centre sets broad policy, states adapt to local conditions

Constitutional basis: Division reflects 7th Schedule - mining spans multiple lists with clear demarcation