Context:
The Ministry of Mines has launched a ₹5,000 crore incentive scheme under the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026–27. It aims to encourage States to accelerate mine auctions, improve governance, and boost mineral production.
- Mining in India is governed by the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), with States responsible for granting mineral concessions.
- The sector follows an auction-based allocation system for mineral blocks to ensure transparency and revenue maximization.
- The Scheme for Special Assistance to States for Capital Investment (SASCI) is a Central initiative that provides financial support to States for capital expenditure and structural reforms.
- The ₹5,000 crore incentive component specifically targets reforms in the mining sector to improve efficiency and output.
- A key focus is faster operationalisation of mines, reducing delays between auction and actual production.
- States are incentivised to integrate with a Unified Mining Portal, enabling digital monitoring, transparency, and real-time data sharing.
- Institutional mechanisms such as Pre-Auction Committees and State-level Coordination Committees are promoted to address land, regulatory, and administrative issues.
- Adoption of technology to prevent mineral grade misclassification ensures fair pricing and reduces revenue loss.
- Pre-embedded clearances (environmental and forest approvals before auction) help reduce project delays and improve investor confidence.
- States are encouraged to operationalise a minimum percentage of previously auctioned mines to ensure timely production.
- The scheme also uses the State Mining Readiness Index (SMRI) to rank and reward States based on performance and reforms.
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Mining Sector Reforms: SASCI Incentive Scheme