Deputy Chief Minister G Parameshwara, in his letter to PM Modi, raised concerns over the Bill's impact on federal fiscal powers and the autonomy of mineral-producing states.The Karnataka Government on Tuesday lodged a formal protest against the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, and urged the Centre to withdraw the recent legislation that allegedly deprives the states of its revenue from taxes, cess and other levies on mineral extraction.In a letter to Prime Minister Narendra Modi, Deputy Chief Minister and Revenue Minister G Parameshwara raised concerns over the Bill’s impact on federal fiscal powers and the autonomy of mineral-producing states. “What the Constitution has consciously placed within the fiscal domain of the states, and what the Supreme Court has expressly reaffirmed as belonging to that domain, should not be neutralised through an expansive invocation of Parliament’s regulatory power,” the letter, dated August 18, read.The Bill, passed by the Lok Sabha and the Rajya Sabha, seeks to prohibit states from imposing specified levies on mineral rights and mineral-bearing lands, except in accordance with conditions or restrictions prescribed by the Centre. In his letter, Parameshwara argued that the Bill, recently passed by Parliament, restricts the authority of state governments to levy taxes, cesses, and other imposts on mineral rights and mineral-bearing lands. “States are carrying growing responsibilities with shrinking fiscal space,” it said.He stressed that the issue extended beyond revenue and touched upon the constitutional principle of India’s federal structure. “Regulation cannot become appropriation. Coordination cannot become centralisation,” he wrote, warning against the erosion of states’ fiscal autonomy.Parameshwara referred to the Supreme Court’s landmark nine-judge bench judgment which upheld States’ legislative rights to impose taxes on minerals in their territory. Following this ruling, Karnataka enacted the Mineral Rights and Mineral Bearing Land Tax Bill, 2024, by exercising its constitutional authority. The new amendment passed by the Parliament undermines this legislation, the letter said.Also read | How a new mining Bill threatens to reignite Centre vs state tensionsHe also criticised the process of passing the Bill, noting the absence of structured consultations with States. “A communication inviting comments cannot substitute for a genuine dialogue between the Union and the States on the redistribution or restriction of constitutional fiscal powers. Legislation affecting the federal compact should emerge from consultation, consensus and cooperation, and not unilateralism,” he said.Highlighting the fiscal pressures on states post-GST, Parameshwara noted that mineral-producing regions bear additional social and environmental costs from mining, including damaged infrastructure, ecological degradation, and community rehabilitation needs. He said that states must “retain meaningful fiscal authority to address these burdens.”Story continues below this adThe letter urged the Central Government to withdraw the Bill, initiate structured consultations with mineral-rich states, and evolve a national framework that balances investment security with State fiscal autonomy.