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NEW DELHI: The central government has called for the large-scale deployment of digital technology and modern surveillance mechanisms across the mining sector to dismantle mafia operations, curb illegal extraction, and stop mineral smuggling. Addressing a conference of state mining ministers, Union Minister of Coal and Mines G. Kishan Reddy stated that a persistent lack of transparency and accountability has historically fostered unlawful practices in mineral-rich belts. He urged state administrations to curb political interference, enforce clear institutional accountability, and adopt outcome-oriented strategies to track extraction, transport, and export activities effectively.
Digital Surveillance to Check Illegal Operations
Emphasizing the role of technology in reforming governance, Reddy noted that persistent political interference has long eroded operational transparency and deterred private capital from entering the mining sector. He stressed that states must reverse this pattern by deploying advanced digital monitoring tools, which would enable authorities to maintain strict oversight over the domestic movement and overseas export of minerals. Weak accountability frameworks inevitably allow illegal syndicates to flourish, making it critical for states not merely to formulate policies but to assign precise operational responsibility to administrative officials and regulatory bodies.
The Union Minister also advised states to actively encourage private enterprise, noting that 100 percent foreign direct investment is permitted in the mining industry. Facilitating broader private participation would channel much-needed capital, sophisticated technology, and international operational standards into the sector. By combining automated monitoring infrastructure with private sector efficiency, regional authorities can establish a credible deterrence against illicit extraction networks while streamlining administrative oversight across active lease sites.
States Receive Over 94 Percent of Mineral Revenue
Highlighting the fiscal dynamics of the sector, Reddy described states as the primary custodians of India’s mineral wealth and pointed out that they stand to gain the most from administrative reforms. State governments receive approximately 94 to 96 percent of total mining revenue, with aggregate collections already crossing 70,000 crore rupees. In addition, funds accrued under the District Mineral Foundation remain entirely with the states, alongside a 50 percent share of goods and services tax levied on minerals. Enhanced governance and tighter tracking would directly bolster state treasuries.
India has also crossed a historic milestone in coal production, exceeding one billion tonnes. In 2025, the total production value of major minerals stood at approximately 1.8 lakh crore rupees, with the broader mining industry generating direct and indirect employment for more than one crore citizens. To build long-term industrial capacity, the central government has allocated 46,000 crore rupees to promote coal gasification initiatives and around 32,000 crore rupees for the critical minerals segment, alongside urging states to establish dedicated critical mineral parks for domestic processing.
Mineral Exchanges and Worker Welfare
To modernize commercial transactions, the Centre is preparing dedicated coal and mineral trading exchanges. These platforms will allow state governments and private leaseholders to sell minerals transparently, bringing order and competitive price discovery to domestic trading. Furthermore, the central government has permitted the duty-free import of 24 critical minerals, a measure intended to ease supply-chain bottlenecks and secure uninterrupted raw material feeds for domestic manufacturers.
Alongside output targets and commercial mechanisms, Reddy emphasized the safety and welfare of mine workers, particularly those deployed in hazardous underground operations. He pointed out the provision of enhanced compensation packages in the event of industrial accidents, noting that rapid production gains must not come at the expense of human life. The government’s broader strategy integrates technological oversight, private investment, critical mineral development, and worker safeguards to eliminate illegal trade while accelerating nationwide industrial growth.
