This article critically appraises the incumbent regulatory mechanism in minerals and proposes a redrawal of the authority of central and state governments. It argues that for ensuring intra-generational and inter-generational equity the ownership rights over minerals should be vested with the state governments and the regulatory power with the central government. State governments should be provided with adequate elbowroom to mobilise revenue for the development of local communities in mining areas. Therefore, the present system of uniform royalty rates determined by the central government should be removed and states should be free to determine their royalty rates and other levies.