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?
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- ABoth Statement I and Statement II are correct and Statement II explains Statement I
- BBoth Statement I and Statement II are correct but Statement II does not explain Statement I
- CStatement I is correct but Statement II is not correct
- 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).
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
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
States can grant or refuse mining permits for minor minerals in their territory
Legal Framework
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
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
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 --> s4Major 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 |
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
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
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 sharingKey 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
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
Mining federalism follows constitutional division - states regulate locally, Centre handles strategic minerals
Cooperative model - Centre sets policy framework, states implement through local knowledge
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
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