SUPREME COURT LETS MINERAL-RICH STATES OUT OF RESOURCE CURSE

THE Supreme Court's verdict in July allowing states to tax mineral rights and mineral-bearing land has brought in a sense of euphoria among the mineral-rich regions of India.

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The ruling is momentous given the financial empowerment it provides to the states by fulfilling this longpending demand. The top court, which clearly defined the line between mineral royalty and tax, made the significant observation that the states' right to impose taxes with their legislative domain must be secured from "unconstitutional interference by parliament" to maintain fiscal federalism. It made a clear case for states such as Jharkhand, Chhattisgarh and Odisha that suffer from what it called the 'resource curse', as they remain backward despite having natural riches.