The government has launched a Rs 5,000 crore incentive mechanism under the SASCI scheme for FY 2026-27 to encourage states to undertake mining sector reforms, aiming to expedite mine operationalisation and boost mineral production.
The government on Friday incorporated an incentive mechanism on mining sector reforms with Rs 5,000 crore outlay in the Scheme for Special Assistance to States for Capital Investment (SASCI) for FY 2026-27.
According to an official press release issued by the Ministry of Mines, the operational guidelines for this scheme component have been issued recently by the said ministry. This is a significant step to encourage mining sector reforms in states.
The objective of this SASCI scheme component is to facilitate and expedite mine operationalisation, increase mineral production, enhance revenue collection by States from the mining sector, and improve overall governance of the mining sector.
Incentive Structure and Reform Areas
Under the scheme, incentives will be provided to states and Union Territories with legislatures across three reform areas. Implementation of Mining Reforms viz. integration of the State with the Unified Mining Portal of the Ministry of Mines for mine operationalization, constitution of a Pre-Auction Committee to actively resolve land scheduling issues, constitution of a State-level Coordination Committee for regular monitoring of operationalization of mines, annual auction calendar for major minerals & adherence to the same to the extent possible, and adoption of technology-based measures to prevent or detect grade misclassification of mineral ore. A State has to undertake all the above five reform actions by 15.12.2026, upon which it will be eligible for the incentive money of ₹100 crore.
The second reform area concerns with incentivizing states for successful auctioning of major mineral blocks with pre-embedded clearances (such as forest, environment, land, etc.) in FY 2026-27 upto 31.12.2026 (₹20 crore per block successfully auctioned, with an upper cap of ₹200 crore per State) and operationalization (i.e. commencement of production and dispatch) during FY 2026-27 (up to 31.12.2026) at least 10% of the major mineral blocks successfully auctioned till 31.03.2026 (₹250 crore per State).
The third component focuses on SMRI-based Reforms. Rewarding the top three States in each of the three categories A, B, and C under the State Mining Readiness Index (SMRI) 2026-27, to be released by the Ministry of Mines (₹100 crore, ₹75 crore and ₹50 crore for securing 1st, 2nd and 3rd position under each category).
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