Government announces Rs 5K cr incentive for states to expedite mining blocks' auction, operationalisation

New Delhi: The government on Friday announced a financial incentive of Rs 5,000 crore for states to expedite the auction and operationalisation of mining blocks.

The scheme, structured in three components, will reward states on a first-come, first-served basis for streamlining the mining processes and adopting tech-driven monitoring.

"Following the success of the previous fiscal year, an incentive mechanism on mining sector reforms with Rs 5,000 crore outlay has been incorporated in the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026-27," the mines ministry said in a statement.


The operational guidelines for this scheme component have been issued recently by the Mines Ministry, it said, and added that this is a significant step to encourage mining sector reforms in the States.

The objective of said scheme is to facilitate and expedite mine operationalisation, increase mineral production, enhance revenue collection by States from the mining sector, and improve overall governance of the mining sector.

States completing key reforms, including integrating with the national mining portal and publishing annual auction calendars, will qualify for incentives under the scheme's first component.

The ministry further said that under the second component, states will get incentives for successfully auctioning major mineral blocks with pre-embedded clearances for forest, environment, land, etc.

The ministry further said that the third component links incentives to performance under the State Mining Readiness Index (SMRI), it said.