Chhattisgarh: the political economy of a mineral-and-forest state, and its seams with the Union

Maintained topic brief. Analysis by IndiaStand — it characterises the state of play and the range of positions actually held, attributes each claim, and makes no forecast and no recommendation.

The state in the federation: what it produces, and where it sits

Chhattisgarh is a mid-sized state by headcount and a heavyweight by output, and the gap between those two facts is the beginning of its political economy. It held 25,545,198 people at the 2011 Census — a little over 2% of the Republic — which places it roughly seventeenth among the states, and it carries a proportionate weight in the two Houses: 11 of 543 Lok Sabha seats and 5 Rajya Sabha seats, with a unicameral 90-seat Vidhan Sabha at Raipur, a Governor appointed by the President, and a separate High Court at Bilaspur that the Madhya Pradesh Reorganisation Act, 2000 provided for when the state was carved out of Madhya Pradesh on 1 November 2000.

What that headcount understates is the state’s place in the physical economy of the country. Chhattisgarh is India’s second-largest coal-producing state, contributing on the order of a sixth of national output, per the state Mineral Resources Department; it holds among the largest coal and iron-ore endowments in the Union, and it is more than 40% forested. That endowment is turned into intermediate goods on the spot: the Bhilai Steel Plant (a public-sector SAIL works) and the Korba thermal-power and aluminium complex make the state a net exporter of steel, electricity and cement into the national grid and national industry. It is also an agricultural core of the eastern rice belt, with paddy the dominant crop and state paddy procurement one of the largest fiscal operations any Chhattisgarh government runs. The structural signature is therefore a resource-rich, per-capita-poor state: it produces commodities the rest of India consumes, while its own per-capita income — about Rs 1.63 lakh in the 2025-26 budget estimate, per PRS — sits below the all-India average, and its human-development and multidimensional-poverty indicators are among the weaker in the country. Roughly a third of its people are Scheduled Tribes and about an eighth Scheduled Castes, a demography that makes the reservation and Fifth Schedule questions below not peripheral but central to how the state is governed.

The fiscal position

Chhattisgarh runs a comparatively orthodox budget for a state of its income level, and it does so by leaning on two revenue pillars that the state does not fully control: mineral royalties and levies, and its share of central taxes. The 2025-26 budget, as read by PRS, projected a GSDP of about Rs 6.35 lakh crore, targeted a revenue surplus of 0.4% of GSDP (against a 1.3% deficit the year before) and a fiscal deficit narrowed to a targeted 3.8% of GSDP. That is a healthier headline than most large states post, and it rests on the mineral economy: iron-ore and coal royalties are consistently among the state’s largest own-revenue lines. The dependence cuts two ways. It gives the state a buffer that a purely services or agrarian state of the same size would lack; it also ties the state’s fiscal health to commodity cycles and to Union decisions on coal royalty rates, mineral auctions and the devolution formula, none of which the state sets. Because so much of the revenue is transfer-linked or commodity-linked, the state is a standing interested party in every Finance Commission cycle and in the design of central mineral policy — which is where its fiscal seams with the Union run (below).

The current government: party, alliance and office

Chhattisgarh did not vote in the 2026 cycle (the 2026 assembly polls fell in Assam, Kerala, Puducherry, West Bengal, Tamil Nadu and elsewhere); its standing government dates from December 2023. In the election of 7 and 17 November 2023, counted on 3 December, the BJP won 54 of the 90 seats on 46.27% of the vote, and the Congress fell to 35 on 42.23%, per the reported returns. The result changed the governing party — a Congress government elected in 2018 was displaced — and a new Council of Ministers was sworn in on 13 December 2023, the state’s fourth ministry since formation. We carry these seat and vote figures at reference tier: they are consistently reported and reflected in the Chhattisgarh dossier’s timeline, but we have not read them off the Election Commission’s own results portal, and this brief does not upgrade a fact’s provenance for convenience.

Under the framing this desk holds to, what matters is institutional rather than personal. The current Chief Minister heads a Council of Ministers responsible to the 90-seat Vidhan Sabha; the Governor, appointed by the President, holds the Article 200 assent power and — distinctively for this state — a separate set of Fifth Schedule powers over the application of laws to the Scheduled Areas. Since December 2023 the state government and the Union government have been in the same party alignment, which changes the day-to-day texture of Centre-state dealings (the internal-security push in Bastar, in particular, is run as a joint Union-state effort) without dissolving the structural seams below. Governments in Chhattisgarh have alternated between the BJP and the Congress across every cycle since 2003; the seats of power described here outlast whichever of the two holds them.

The Centre-state fault lines specific to this state

Four seams distinguish Chhattisgarh’s position in the Republic. Each is a standing argument that survives a change of party at Raipur.

Bastar, the Fifth Schedule and internal security. This is the state’s defining fault line and it has no parallel of the same intensity elsewhere. Large parts of Chhattisgarh — above all the seven districts of the Bastar division in the south — are Fifth Schedule Scheduled Areas, where the Governor holds distinct constitutional powers over the application of laws and where tribal administration and land protection run on a separate track from the ordinary State List. Those same tracts hold much of the mineral and forest endowment the budget depends on, and they have been the principal theatre of Left-Wing Extremism for the state’s entire existence. The constitutional friction is precise: law and order and the police are a State List subject, but the Union runs the counter-insurgency policy and keeps central armed police forces permanently deployed on state ground, so the Union’s internal-security machinery and a State List government meet here more continuously than anywhere else in India. Through 2024-25 the theatre contracted sharply on the back of sustained operations and mass surrenders; the Union Home Ministry set a stated target of ending Naxalism by 31 March 2026 and, as reported by the government broadcaster, declared the target substantially met, pivoting to a Bastar “development” programme. The 2011 Supreme Court judgment disbanding the Salwa Judum militia stands as the judiciary’s marker that the campaign is held to constitutional limits. What the contraction of the security frame leaves unresolved is a governance question, held in different terms by different actors: whether Bastar is now governed primarily through the Fifth Schedule and PESA (the tribal-self-governance track), through the mineral economy (mining and infrastructure into former conflict districts), or through a continued security architecture — positions that the Union, the state, and tribal-rights and civil-liberties groups articulate differently, and which this desk records rather than adjudicates.

Mineral fiscal federalism. As a top mineral producer, Chhattisgarh is a direct beneficiary of the Supreme Court’s nine-judge ruling of 25 July 2024 in Mineral Area Development Authority v. Steel Authority of India (2024 INSC 607), which held by 8:1 that royalty is not a tax and that a state legislature’s power to tax mineral rights and mineral-bearing land is not curtailed by the royalty the Union levies under the MMDR Act. A follow-on order made the ruling retrospective to 1 April 2005, with interest and penalties on pre-judgment demands waived and staggered payment allowed over twelve years from 1 April 2026. For a mineral state the stakes are large: it expands the state’s own taxing room over exactly the commodities that anchor its budget. The contest, as the Supreme Court Observer records, is between the states’ reading — that this restores fiscal federalism and a legitimate revenue base — and the industry-and-Union reading that a patchwork of state mineral taxes on top of central royalty raises input costs and invites a “race to the bottom” among producing states competing for investment. It sits alongside the older, unglamorous argument that runs through every Finance Commission: whether the coal royalty rates the Union sets, and the devolution formula, adequately compensate a state that bears the environmental and displacement costs of extraction.

The Mahanadi water dispute. The Mahanadi rises in Chhattisgarh and flows into Odisha, and the two states have contested its sharing for a decade, with Odisha alleging that upstream Chhattisgarh dams and barrages restrict non-monsoon flows to its lower basin. The Union constituted the Mahanadi Water Disputes Tribunal in 2018 under the Inter-State River Water Disputes Act; as of 2025 the tribunal had pressed both states toward an amicable settlement, with weekly technical meetings but roughly forty “core issues” on flows, storage and barrages still unresolved and the tribunal’s mandate extended into 2026. This is the classic form of a Centre-mediated inter-state dispute: water is a state subject, but an inter-state river is adjudicated through a Union-constituted tribunal, and the state’s development of its own upstream storage is precisely what the downstream state contests. We carry the tribunal timeline at reference/news tier pending a primary reading of the tribunal’s own orders.

Reservation quantum and the Governor’s assent. Chhattisgarh’s large ST and SC populations make the size of its reservation regime a first-order political question, and it became a Centre-state and Governor-assent question. In December 2022 the then Congress-led Assembly unanimously passed two amendment bills raising total reservation in state jobs and education to 76% (ST 32%, OBC 27%, SC 13%, EWS 4%), as reported by Outlook, after the High Court had earlier struck down an existing 58% regime as breaching the 50% ceiling. The Governor did not grant assent, and the delay was itself litigated in the High Court (which stayed its own order seeking a response from the Raj Bhavan on the delay), while the reservation matter ran in parallel before the courts. The change of government in December 2023 layered a party dimension onto the constitutional one — the bills were a Congress government’s, now to be defended or not by a BJP government — and the precise current status of the 76% bills (assented, lapsed, or superseded) is not something we can state cleanly from a primary source as of this writing; it is logged as unverified below. The durable point is structural: the state’s demography pushes its reservation ceiling against the Supreme Court’s 50% line, and the route from an Assembly vote to an operative law runs through the Governor’s assent and the courts — the same Article 200 machinery that has produced Centre-state friction in several states.

Contested vs settled, as of 28 July 2026

Settled, in the sense of not seriously disputed as fact: that Chhattisgarh was formed in 2000 as the 26th state with 90 assembly, 11 Lok Sabha and 5 Rajya Sabha seats; that the BJP won 54 of 90 seats in December 2023 and displaced a Congress government; that the state is India’s second-largest coal producer and a net exporter of steel and power; that the 2025-26 budget targeted a small revenue surplus and a 3.8%-of-GSDP fiscal deficit; that the 2024 Supreme Court ruling affirmed states’ power to tax mineral rights, retrospectively to 2005; and that the Left-Wing Extremism theatre has contracted sharply and is now concentrated in and around Bastar.

Contested, in the sense of being live arguments with attributed positions on each side: whether the Union’s declaration that Naxalism has been effectively ended reflects a durable political settlement of Bastar or a military containment that leaves the Fifth Schedule and tribal-governance questions open (the Union-and-state view versus the tribal-rights and civil-liberties view); whether expanded state mineral taxation after the 2024 ruling restores fiscal federalism (the states’ view) or raises industrial costs and invites competitive over-taxation (the industry-and-Union view); how the Mahanadi’s flows are apportioned between an upstream and a downstream state (the two states’ positions, now channelled through the tribunal toward settlement); and how far a state’s reservation regime may exceed the 50% ceiling to match its ST/SC/OBC demography, and by what route it becomes law. IndiaStand does not adjudicate these; it records that each position is held and by whom.

Open on our own record: the current legal status of the December 2022 76%-reservation bills (assent, lapse or supersession) and the precise composition of current own-tax mineral revenue are logged as unverified below rather than stated as fact.

Who owns this topic (and why we are here)

A search today for “Chhattisgarh government,” “Bastar Naxalism 2026” or “Chhattisgarh reservation” surfaces three layers that each leave the same gap. The primary layer — the state portal, the Chief Electoral Officer’s site, News on AIR, the Supreme Court’s own judgment — is authoritative but scattered and not synthesised. Live news carries the event (a surrender count, a budget headline, a tribunal hearing) without connecting it to the structure. And the exam-prep and encyclopaedic-mirror ecosystem (Drishti-IAS, Vision-IAS, Wikipedia mirrors) is strong on the evergreen scaffolding — formation date, seat counts, the Fifth Schedule definition — but freezes at its last update and rarely holds a dated, sourced, one-frame account of how the mineral economy, the Bastar security question, the 2024 royalty-taxation ruling, the Mahanadi dispute and the reservation-and-assent tangle fit together as one system.

That join is what this desk maintains. IndiaStand out-structures the explainer layer on freshness plus provenance: a state-of-play that is dated (“as of 2026-07-28”), that ties each load-bearing claim to a real URL and an honest tier, that names institutions and offices rather than personalities, and that links the transient event to the standing fault lines and to the national briefs — internal security, caste and reservation, critical minerals, water policy, fiscal stance — that Chhattisgarh belongs to, anchored to the structured Chhattisgarh dossier. When an AI search is asked “who governs Chhattisgarh and what are its disputes with the Centre,” the answer needs exactly that join — the fact, the frame, and the citation — which is the join this brief keeps current.

Maintained topic brief. Analysis by IndiaStand — it characterises the state of play and the range of positions actually held, attributes each claim, and makes no forecast and no recommendation.

questions: [“Who governs Chhattisgarh as of 2026, and by what mandate?”,“Why is Chhattisgarh a resource-rich but per-capita-poor state?”,“What are Chhattisgarh’s main disputes with the Centre — Bastar/Fifth Schedule, mineral taxation, the Mahanadi, and reservation?”,“What did the 2024 Supreme Court mineral-royalty ruling mean for a coal state like Chhattisgarh?”,“What is the status of Left-Wing Extremism in Bastar in 2026?”]