The Government of India has introduced a performance-linked incentive framework aimed at accelerating reforms in the mining sector, with a dedicated allocation under its capital investment support scheme for states.
The initiative has been rolled out under the Ministry of Mines as part of the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026–27, with a total outlay of ₹5,000 crore. Operational guidelines for this component have already been issued.
The programme is designed to fast-track mine operationalisation, increase mineral output, enhance revenue generation for states and strengthen governance across the mining ecosystem. The incentives are available to states and Union Territories with legislatures.
The first component focuses on implementation of key mining reforms. States are required to complete a set of five actions by December 15, 2026.
These include integration with the Unified Mining Portal, formation of a Pre-Auction Committee to resolve land-related issues, establishment of a State-level Coordination Committee to monitor mine operationalisation, preparation and adherence to an annual auction calendar for major minerals, and adoption of technology-based measures to prevent grade misclassification of mineral ore.
States completing all these actions within the stipulated timeline will be eligible for an incentive of ₹100 crore.
The second component provides incentives linked to auction activity and production readiness. States will receive ₹20 crore for each successfully auctioned major mineral block with pre-embedded clearances such as environmental and land approvals, subject to a maximum of ₹200 crore per state. This applies to auctions completed by December 31, 2026.
Additionally, states can earn up to ₹250 crore if they operationalise at least 10% of the mineral blocks auctioned up to March 31, 2026, within FY27 up to December 31, 2026. Operationalisation includes commencement of production and dispatch.
The third component is based on the State Mining Readiness Index (SMRI) 2026–27. States will be ranked across three categories, A, B and C.
In each category, the top three states will receive performance-based incentives of ₹100 crore for first place, ₹75 crore for second place and ₹50 crore for third place.
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The incentive framework reflects a structured approach to drive reforms in the mining sector by linking financial support to measurable outcomes in governance, auction activity and operational efficiency.
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Published on: Apr 27, 2026, 11:08 AM IST
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