Rajasthan Faces Rising Construction Costs as Mineral Royalty Fees Increase

The Rajasthan government has significantly increased the royalty fees charged on 24 different mineral substances, including essential construction materials like gravel, sandstone, and marble. This decision is set to directly impact construction costs across the state, making building materials more expensive for consumers and developers alike. The move is expected to generate additional revenue for the state exchequer but will undoubtedly add to the financial burden of house construction and infrastructure projects, particularly given the already fluctuating prices of raw materials.

According to the new notification issued by the Department of Minerals, the royalty fee on gravel has been uniformly increased to ₹60 per tonne across all districts, up from the previous rates of ₹50 per tonne in some areas and ₹45 per tonne in others. This standardization aims to ensure consistent pricing statewide. Experts estimate that this hike will raise the price of gravel by up to ₹600 per truck, based on a 40-tonne capacity. Similarly, the royalty on ‘cheja stone’ (sandstone), which is widely used in construction, has been increased by ₹80 per tonne, moving from ₹240 per tonne to ₹320 per tonne for finished stone, with raw material costs also seeing an upward revision.

The impact extends to other crucial minerals as well. Marble extracted from Makrana and surrounding areas, previously charged at ₹490 per tonne, and marble from other parts of the state at ₹560 per tonne, have now been standardized and increased to ₹550 per tonne. The royalty on stone used in tiles has risen from ₹455 to ₹500 per tonne. Furthermore, the royalty on stones utilized in making chips concrete, such as dolomite, limestone, and rhyolite, has seen a substantial increase from ₹90 to ₹130 per tonne. These revised rates, implemented after a gap of four years, reflect the government’s effort to boost state revenue, with the Mines Department having sent a proposal for these increases earlier to the state government.

These royalty hikes are expected to have a direct bearing on the common person, making house construction costlier throughout Rajasthan. The state’s mining sector has been proactive in increasing revenue, with a recorded collection of ₹9,228 crore in royalty in 2024-2025, a 24 percent increase from the previous year. This revenue generation is crucial for state development, but the increased costs will need to be absorbed by the construction industry and ultimately passed on to end-users. Industry stakeholders anticipate a recalculation of project budgets and a potential slowdown in new construction starts if the increased material costs prove too burdensome.

The government maintains that these revisions are part of broader efforts to manage mineral resources effectively and ensure fair valuations. However, the immediate consequence will be a notable rise in the cost of construction, posing a challenge for builders and homebuyers across Rajasthan.

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Rajasthan Faces Rising Construction Costs as Mineral Royalty Fees Increase