INDUSTRY
Centre slots Rs 5,000-cr sops for States to spur mine production, mining reforms
- IBJ Bureau
- Apr 24, 2026
The Centre has earmarked Rs 5,000 crore as incentives for accelerating reforms and boosting production in the mining sector.
The incentives focus strongly on faster operationalisation of mines and improved governance.
The scheme, structured in three components, will provide financial incentives to States on a first-come, first-served basis, encouraging them to streamline administrative processes and adopt technology-driven monitoring systems.
States completing key reform measures – like integrating with the national mining portal, setting up coordination committees and publishing annual auction calendars – will be eligible for incentives under the first component, which has an outlay of Rs 2,000 crore.
Another Rs 2,500 crore has been earmarked for operationalisation of mines.
States will receive Rs 20 crore per mineral block auctioned with pre-embedded clearances, subject to a cap.
Besides, an additional Rs 250 crore incentive is tied to achieving operationalisation of at least 10 per cent of auctioned blocks within a specified timeline.
This is expected to address long-standing bottlenecks in land acquisition, environmental approvals and logistical preparedness that often delay production.
The third component links incentives to performance under the State Mining Readiness Index (SMRI), with Rs 675 crore set aside to reward top-performing States across different categories.
This ranking-based approach is designed to foster competition and improve sectoral efficiency.
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