Centre Unveils ₹5,000 Crore Plan to Accelerate Mining Reforms Across States

In a major policy push to accelerate reforms in India’s mining sector, the Ministry of Mines has introduced a ₹5,000 crore incentive package under the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026–27. The initiative aims to boost mineral production , fast-track mine operationalization , and improve governance , while shifting toward a performance-linked funding model instead of traditional allocations. Notably, the Centre has not earmarked funds state-wise or mine-wise , making this a competitive and outcome-driven framework where only states meeting defined reform milestones receive incentives.

Under the scheme, states can unlock financial support by implementing time-bound reforms , including integration with the Unified Mining Portal , creation of institutional mechanisms like Pre-Auction Committees and Coordination Committees , publication of auction calendars, and adoption of technology to prevent mineral grade misclassification . States completing these requirements by December 2026 can receive ₹100 crore, while additional incentives are tied to auctioning mineral blocks with clearances and ensuring actual commencement of mining operations , with rewards reaching up to ₹250 crore. Rankings under the State Mining Readiness Index (SMRI) will further determine performance-based rewards, encouraging accountability and competition .

A key focus of the scheme is bridging the gap between mine allocation and production , addressing persistent delays caused by land issues, regulatory bottlenecks, and clearances . By linking financial incentives directly to measurable outcomes , the government aims to ensure that auctioned mines quickly translate into active production, strengthening both state revenues and industrial supply chains .

While the scheme does not provide direct funding to companies, public sector entities like Singareni Collieries Company Limited are expected to play a crucial on-ground role. As a major coal producer jointly owned by Telangana and the Centre, SCCL is positioned as a key execution partner , supporting faster operationalization, driving technology adoption , and contributing to higher output. Its ongoing expansion plans align with the scheme’s broader objective of increasing production and efficiency , enabling states like Telangana to maximize incentives.

Overall, the reform marks a structural shift in mining governance , moving from centralized allocations to a decentralized system driven by performance, transparency, and efficiency . The success of this initiative will depend on how effectively states implement reforms and how efficiently operators like SCCL translate policy into ground-level execution , ultimately shaping the future of India’s mining sector.