Punjab Amends Mining Policy to Boost Legal Sand and Gravel Supply, Revenue

• Apr 4, 2025

In a major move to increase the legal supply of minor minerals and curb illegal mining, the Punjab Government has amended its Minor Minerals Policy, allowing individuals and crusher owners to mine sand and gravel on their own land by paying a government royalty. The decision was approved during a Cabinet meeting chaired by Chief Minister Bhagwant Mann.

The new provisions aim to enhance the availability of legally mined sand and gravel in the market, thereby reducing retail prices and benefiting the general public. Officials believe this will also provide a significant boost to the state’s revenue.

One of the key amendments also authorises Deputy Commissioners to grant No Objection Certificates (NOCs) to allow the clearance of sand from government land on a “mission mode.” Additionally, contractors bidding for the soon-to-be-auctioned 104 mining sites will now be responsible for securing environmental clearances—a task previously handled by the state government.

The revised policy is based on a draft report by the Department of Mines and Geology and the Punjab Development Commission. The report revealed that only 4% of sand and gravel in Punjab is supplied legally, while the remaining 96% is either illegally mined or imported from other states. With current mining operations limited to 63 commercial and 72 public mines producing just 34 crore cubic feet annually—against a demand of 300 crore cubic feet—the policy overhaul seeks to bridge the gap.

In 2023–24, Punjab earned ₹288.52 crore from mining, while between April and October 2024, it collected ₹109.21 crore. The government now hopes to raise mining revenues to ₹800 crore annually under the new framework.

Highlighting the financial implications, Finance Minister Harpal Cheema announced that the royalty for gravel crushing has been increased from ₹0.73 to ₹3.20 per cubic foot, while for sand, it has been raised from ₹0.73 to ₹1.75 per cubic foot.

Water Resources and Mining Minister Barinder Kumar Goyal said the amended policy would streamline mining operations, improve transparency, and help eliminate illegal mining practices.