New Delhi: In a significant move aimed at accelerating reforms in India’s mining sector, the Central Government has introduced a financial incentive mechanism worth ₹5,000 crore under the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026–27.
The initiative, announced by the Ministry of Mines, is designed to encourage States and Union Territories with legislatures to adopt key reforms that improve mining efficiency, transparency, and revenue generation.
The scheme follows the success of similar measures in the previous financial year and is expected to significantly improve mining governance across the country.
Objective: Faster Mine Operations and Better Governance
The primary objective of the new SASCI mining reform component is to:
- Speed up mine operationalisation
- Increase mineral production
- Improve State revenue from mining activities
- Strengthen governance and transparency in the mining sector
The scheme focuses on incentivising structural and technological reforms that make mineral auctions and production more efficient and accountable.
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Three Key Reform Areas Under the Scheme
The incentive framework is divided into three major reform categories that States must implement to become eligible for financial assistance.
1. Implementation of Mining Reforms
States must undertake a series of governance and technology-driven reforms, including:
- Integration with the Unified Mining Portal of the Ministry of Mines
- Formation of a Pre-Auction Committee to resolve land and scheduling issues
- Establishment of a State-level Coordination Committee for monitoring mine operations
- Preparation of an annual auction calendar for major minerals and adherence to it
- Adoption of technology-based systems to detect or prevent grade misclassification of mineral ore
If a State successfully implements all five reforms by 15 December 2026, it will be eligible for an incentive of ₹100 crore.
2. Incentives for Mine Operationalisation
The scheme also rewards States for improving the efficiency of mineral block auctions and bringing mines into production.
Key provisions include:
- ₹20 crore per successfully auctioned major mineral block with pre-embedded clearances (forest, environment, land, etc.), capped at ₹200 crore per State
- ₹250 crore per State for operationalising at least 10% of auctioned major mineral blocks, provided they begin production and dispatch by 31 December 2026
This component aims to reduce delays in approvals and ensure quicker conversion of auctioned blocks into active mining operations.
3. Performance-Based Rewards Under SMRI 2026–27
The third component of the scheme introduces performance-linked rewards based on the State Mining Readiness Index (SMRI) 2026–27, to be released by the Ministry of Mines.
States will be ranked across three categories (A, B, and C), and incentives will be awarded as follows:
- 1st place: ₹100 crore
- 2nd place: ₹75 crore
- 3rd place: ₹50 crore
This competitive framework is expected to encourage States to improve regulatory efficiency and overall mining readiness.
Expected Impact on India’s Mining Sector
The ₹5,000 crore incentive scheme is expected to:
- Accelerate mining reforms across States
- Improve ease of doing business in the mining sector
- Boost mineral production and auction efficiency
- Enhance transparency through digital integration
- Increase State revenues from natural resources
By linking financial support to performance, the government aims to create a more competitive and reform-driven mining ecosystem in India.
About SASCI Scheme
The Scheme for Special Assistance to States for Capital Investment (SASCI) is a central government initiative designed to support States in boosting capital expenditure and infrastructure development. The 2026–27 mining reform component strengthens the scheme’s focus on sector-specific reforms, particularly in mining, by linking incentives to measurable governance outcomes.
