Sand Gets MSP: Odisha Ends Auctions, Brings E-Lottery in War Against Mafia

In an unprecedented move, the Odisha government has introduced a Minimum Support Price (MSP) on sand, becoming the first state in India to treat a minor mineral like an agricultural commodity. The decision was cleared during a cabinet meeting chaired by Chief Minister Naveen Patnaik, marking what officials describe as a landmark reform in the mining sector.

End of Open Auctions, Uniform Pricing Across State

Amendments to the Odisha Minor Mineral Concession Rules, 2016 have paved the way for discontinuing open auction of minor mineral leases. The state has mandated uniform government-fixed MSP on sand, ensuring that leaseholders cannot charge even Re 1 above the prescribed fee.

The new rules also include:

• Total prohibition on unauthorised excavation

• Complete ban on hoarding/profiteering without a storage licence

• Allocation of reserves through e-lottery system instead of auctions

• Special storage licences to prevent stockpiling and price manipulation

Mining Minister Bibhuti Bhusan Jena hailed the reforms as a “game-changer”, asserting that they would reduce sand prices for the public, ensure transparency in transactions and break the mafia nexus that has dominated minor mineral extraction for years.

Opposition Slams E-Lottery: “Admission of Failure”

The decision has triggered sharp political reactions. Senior BJD leader and former minister Arun Sahoo attacked the government’s shift to e-lottery, calling it “bhagya-gula (fate gambling)”.

“When you are desperate and none of the means work, you go for a lottery. If auctions are not needed in sand mining, then why not pick BJP ministers and the Chief Minister through a lottery?” Sahoo mocked.

He alleged that the system favours ruling party workers and accused BJP leaders of extortion in sand mining, claiming sand is being sold at ten times its actual price and smuggled into neighbouring states.

Sahoo threw a political challenge on revenue transparency:

“Let the government release the revenue numbers after 12 months. That will reveal the real motive behind scrapping auctions.”

A Sector Entering Turbulence

The crackdown on the sand mafia, the introduction of MSP, and the new allocation-cum-storage system place Odisha’s minor mineral ecosystem in a critical transition phase. Pro-reform lobbyists view the decision as structural, while sceptics warn of operational chaos and political favouritism.

As the new pricing experiment rolls out across the state, Odisha’s sand economy — worth thousands of crores — is now at the centre of tough scrutiny. The coming months will determine whether the reforms truly democratise access or trigger a fresh cycle of controversies in the mineral sector.