Punjab Govt’s Landmark Mining Reforms to Boost Supply, End Illegal Mining, Enhance Transparency

Chandigarh: The Punjab government under the leadership of Chief Minister Bhagwant Mann has undertaken far-reaching reforms in the state’s mining sector, approving significant amendments to the Punjab Minor Mineral Policy aimed at ensuring adequate supply of raw materials, curbing illegal mining and corruption, reducing prices for consumers, increasing state revenues, and eliminating monopolistic practices.Following extensive consultations with stakeholders at multiple levels, the Cabinet approved amendments that introduce new mining categories, modernise auction mechanisms, and streamline regulatory processes, marking a decisive shift towards transparency, fairness, and citizen-centric governance in the mining sector.Speaking on the reforms,

Mines and Geology Minister Barinder Kumar Goyal said, “Our government is committed to ending opacity in mining and ensuring that natural resources are used for the benefit of the people. By shifting to transparent online auctions, we are protecting state revenue, creating a level playing field for genuine operators, and curbing illegal mining.”For years, Punjab’s mining sector suffered from an acute shortage of authorised mining sites. With barely around thirty-five operational mines across the state, legal supply fell far short of the demand for construction material required for roads, housing, and infrastructure projects. This mismatch created a vacuum that was increasingly filled by illegal mining and unregulated supply chains.To address this structural problem, the Punjab government adopted a clear strategic shift. Instead of allowing illegality to persist, it chose to gradually legalize mining supply by encouraging operators to come forward, disclose existing mining activity, complete proper documentation, and operate strictly within a defined regulatory framework. The government has made it clear that mining will continue, but only when conducted legally, transparently, and with due approvals.

Crusher Mining Sites to Strengthen Local Industry

A major reform under the amended policy is the introduction of Crusher Mining Sites (CRMS) to address long-standing issues faced by the crusher industry. Earlier, gravel mining was restricted to Commercial Mining Sites auctioned by the Department, resulting in chronic shortages of raw material. Crusher owners were dependent on limited CMS output or forced to source material from other states, often at higher costs, even as many owned land with gravel deposits that remained non-operational.Under the CRMS framework, crusher owners who possess land with gravel deposits can now obtain mining leases and mine material for their own operations. This reform is expected to significantly increase the availability of crushed sand and bajri, support development works across Punjab, reduce dependence on other states, curb illegal inter-state transportation of minerals, boost employment within the state, improve efficiency in the crusher industry, enhance state revenues, and reduce prices for consumers.

Landowner Mining Sites to Empower Farmers and Prevent Monopolies

In sand mining, the government has introduced Landowner Mining Sites (LMS) in addition to existing Commercial Mining Sites and Public Mining Sites. Earlier, sand mining was frequently stalled as landowners hesitated to allow unknown operators onto their land, even as they repeatedly approached the government seeking permission to mine their own holdings.The LMS framework now allows landowners to mine sand from their own land, either themselves or through authorised persons, on payment of royalty to the state. This reform will expand the number of legal mining sites, boost sand supply, increase state revenue, lower consumer prices, create new business opportunities for Punjabis, and decisively prevent monopolisation by ensuring that every eligible landowner can obtain a mining lease and sell material in the open market.

Streamlined Approvals and Strong Industry Response

The policy also tackles one of the most persistent bottlenecks in mining, regulatory delays. Earlier, mine certification and environmental approvals through bodies such as the State Environment Impact Assessment Authority (SEIAA) often took seven to nine months, and in some cases extended into years. These processes have now been streamlined and placed in mission mode, with multiple clearances processed in parallel to ensure time-bound decisions without diluting regulatory safeguards.The response from the sector has been overwhelming. The government has received 290 applications under the CRMS and LMS categories. Processing is underway, with 26 Letters of Intent already issued.Remaining applications will be taken up after completion of mandatory processes, including inclusion of sites in District Survey Reports.More than 200 new mining sites have been identified across districts, with surveys, technical vetting, public consultations, and Environmental Impact Assessment studies currently in progress. Most of these mines are expected to become operational between December 2025 and March 2026, substantially easing supply constraints and reducing pressure on existing sites.Officials said the first approvals mark the beginning of a systematic clean-up of the mining supply chain.Wherever mining continues, it will have to be legal, documented, and regulatory approved. Operations outside this framework will face strict action. The government has reiterated that mining is permitted, but illegality will not be tolerated.

Transparent Auctions After Three Years, Major Rule Reforms

Reaffirming its commitment to clean governance, the Punjab Government has also launched fresh auctions for mining sites, the first such exercise conducted in the last three years.In Phase 1, 29 sites were auctioned as Commercial Mining Sites through an open and competitive online bidding process. Sixteen successful bids were received, generating Rs 11.61 crore in revenue.To address systemic flaws in the earlier volume-based auction model, which often led to draw-of-lots outcomes, fake bidders, revenue loss, and delays, the Cabinet has approved sweeping reforms aligned with best national practices.These include a shift to price-based bidding, mandatory upfront payments by bidders, advance royalty payments to ensure steady revenue flows, transfer of responsibility for environmental clearances to bidders, clear dead rent provisions to prevent speculative holding, and extension of lease tenure from three to five years to provide greater operational stability.With nearly 100 more sites to be brought under auction in a phased manner, these reforms are expected to ensure greater raw material availability for industry, higher and more predictable revenues for the state, faster operationalisation of mines, and stronger regulatory clarity and transparency.Officials stated that together, the introduction of CRMS and LMS, streamlined approvals, and reformed auction mechanisms represent the most comprehensive overhaul of Punjab’s mining sector in years, aimed at ending illegal mining, strengthening revenue, and ensuring that natural resources are managed in a clean, fair, and people-centric manner.