The Ministry of Coal has said that 147 commercial coal blocks auctioned across nine states since 2020 are expected to contribute significantly to the economy, generating around ₹47,500 crore in annual revenue, ₹55,000 crore in capital investment and nearly 490,000 employment opportunities.
The ministry said commercial coal mines generated ₹3,090 crore in revenue through upfront and premium payments during 2025-26.
It added that the current revenue-sharing mechanism, which includes royalty, premium payments, District Mineral Foundation (DMF) contributions and National Mineral Exploration Trust (NMET) payments, has helped states substantially increase their coal-related earnings.
“Every auctioned block contributes a strong share to the states in the form of revenue share (the competitively bid revenue share, additional to royalty), royalty (statutory, to the state), DMF contributions (ploughed back into the mining district via Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), NMET contributions (funding future exploration) and Goods & Services Tax (GST),” the ministry said.
The government also pointed to recent legislative changes, including the Mines and Minerals (Development and Regulation) Amendment Act 2026, which creates a uniform fiscal framework for the sector.
Under the amended provisions, states cannot impose additional taxes on mineral rights and mineral-bearing land beyond conditions specified by the Centre.
Transparent auction process expands private participation
The ministry said commercial coal auctions were introduced in 2020 after the Supreme Court cancelled 204 coal block allocations in 2014. The new system moved allocation towards a transparent and competitive process.
“Bidding is conducted online in two stages on the MSTC platform, with bid documents decrypted and opened live in front of bidders. There is no end-use restriction, 100 per cent FDI is allowed through the automatic route, and upfront payments are kept low and adjustable against future revenue share, keeping the field open to smaller and newer players,” the ministry said.
According to the ministry, 147 mines have been auctioned so far, with 44 new companies securing coal blocks. Production from commercial mines increased from 12.55 million tonnes in 2023-24 to 23.51 million tonnes in 2024-25.