New guidelines require states to activate 79 mineral blocks by December 31 to unlock massive funding.

Indian states must quickly operationalise recently auctioned mineral blocks to claim a share of a ₹5,175 crore federal incentive package.

Regional governments across India are racing to secure a massive financial windfall. The Finance Ministry has outlined clear rules for accessing ₹5,175 crore in mining incentives. These funds fall under the Scheme for Special Assistance to States for Capital Investment 2026-27.

To qualify, states must swiftly operationalise various recently auctioned mineral assets. Specifically, regional authorities need to bring 79 major and critical mineral blocks into production. This target represents exactly 10 per cent of the 684 blocks auctioned before March 31. Furthermore, officials have set a strict deadline for this massive undertaking on December 31.

Different regions face varying production targets to claim their share of the incentive package. Rajasthan and Madhya Pradesh must operationalise at least 13 mines each to qualify. Odisha requires eight active sites, while Karnataka and Chhattisgarh need seven each. Gujarat and Maharashtra must activate six and five mines, respectively, to unlock funding.

The finance ministry divided the total outlay into three distinct strategic categories. Officials earmarked ₹2,500 crore specifically for the successful operationalisation of mines. They also allocated ₹2,000 crore to drive essential mining governance reforms across the country. Additionally, the remaining ₹675 crore will reward top performers on the State Mining Readiness Index.

The most lucrative payouts strongly favour rapid site activation and operational readiness. Therefore, states will receive ₹20 crore for every major block auctioned during 2026-27. These sites must already possess the necessary forest, environment, and land clearances. Ultimately, each state can earn a maximum payout of ₹200 crore through this specific mechanism.

(Source: ET Energyworld)

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