Centre rolls out Rs 5,000 crore mining reform incentives for FY27

The Government has introduced a Rs 5,000 crore incentive mechanism for mining sector reforms under the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026-27. The Ministry of Mines has issued the operational guidelines for this component, aimed at accelerating reforms across States and Union Territories (UTs) with legislatures.

The scheme targets faster mine operationalisation, higher mineral output, improved revenue collection, and stronger governance in the mining sector. Incentives will be provided across three reform areas.

Under mining reforms, States are required to complete five actions by December 15, 2026. These include integration with the Unified Mining Portal, setting up a Pre-Auction Committee to address land-related issues, forming a State-level Coordination Committee for monitoring, publishing an annual auction calendar for major minerals, and adopting technology-based measures to detect grade misclassification. States completing all five actions will be eligible for Rs 100 crore.

For mine operationalisation, incentives are linked to both auction and production. States will receive Rs 20 crore per major mineral block auctioned with pre-embedded clearances in FY 2026-27, capped at Rs 200 crore per State. An additional Rs 250 crore will be provided to States that operationalise at least 10% of the major mineral blocks auctioned up to March 31, 2026, within FY 2026-27.

The scheme also includes performance-based incentives under the State Mining Readiness Index (SMRI) 2026-27. The top three States in each of the three categories—A, B, and C—will receive Rs 100 crore, Rs 75 crore, and Rs 50 crore for first, second, and third positions, respectively.

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