DISTRICT MINERAL FOUNDATIONS: GOVERNANCE/POLITY
NEWS: Over half of ₹1-lakh crore collected for the welfare of mining districts not spent: report
WHAT’S IN THE NEWS?
An independent research report by iForest highlights the underutilisation and misutilisation of over ₹1 lakh crore in District Mineral Foundation (DMF) funds, with inefficiencies in fund allocation and lack of local participation. The report calls for improved planning, governance, and better focus on human development in mining-affected areas.
District Mineral Foundations (DMF) – Research Analysis Report
• Report Overview:
• The report, prepared by iForest, an independent research group, presents an assessment of the District Mineral Foundations (DMFs) across India.
• The research includes a decadal pan-India review of all 23 states where DMFs have been established.
• It highlights issues such as underutilisation and misutilisation of funds collected through DMFs.
Key Findings:
• Unspent Funds:
• Over ₹1 lakh crore has been collected in the past decade, yet more than half of these funds remain unspent.
• Mineral-Wise Share:
• Non-coal major minerals (like iron, manganese, bauxite) account for 51.5% of the total DMF accruals.
• Coal and lignite contribute approximately 37% of the funds.
• Minor minerals contribute about 11.5% of the total DMF funds.
• State-Wise Share:
• Odisha accounts for 29%, Chhattisgarh for 14%, and Jharkhand for 13% of the total DMF funds collected in the past 10 years.
• Together, these three states represent more than 56% of the total DMF funds in India.
• Future Projections:
• The projected total DMF accruals for the next 10 years (2025-26 to 2034-25) are expected to range from ₹2,50,000 crore to ₹3,00,000 crore.
• Annual accruals are projected to be between ₹20,000 crore and ₹30,000 crore.
Concerns Raised:
• Suboptimal Institutional Design:
• The DMFs are predominantly controlled by officials and elected representatives, with minimal involvement from the mining-affected communities, particularly those from Gram Sabhas in mining villages.
• Inefficient Fund Utilisation:
• DMF funds are largely directed towards infrastructure-heavy investments, often neglecting human resource development and social infrastructure.
• Example: In Dhanbad, out of 1,164 projects sanctioned until 2024, only ₹1.86 crore was allocated for skill development and livelihood generation.
• In Kendujhar, only 3.2% of the total allocations were directed towards livelihood and skill development projects until 2022.
• Lack of Systematic and Long-Term Planning:
• There is no coherent, long-term planning for the utilisation of DMF funds. Often, funds are diverted to activities unrelated to the welfare of mining districts.
• Lack of Local Participation:
• The absence of local participation in identifying and designing intervention measures has hindered the full potential of DMF funds.
About District Mineral Foundations (DMF)
• Overview:
• DMFs are non-profit trusts set up by state governments in mining districts across India.
• They represent one of the largest financial resources for interventions aimed at improving the lives and livelihoods of people in mining-affected areas.
• Minerals Covered:
• DMFs cover coal, lignite, major minerals like iron, manganese, and bauxite, as well as minor minerals.
• Coverage:
• DMFs have been established in 645 districts across 23 states in India.
• Legal Framework:
• DMFs were established under Section 9B of the Mines and Minerals (Development and Regulation) Amendment Act, 2015.
• Objectives:
• The primary objective of DMFs is to alleviate poverty and deprivation in mining-affected districts, and work towards their socio-economic development.
• Funding Source:
• The funds for DMFs are contributed by mining leaseholders.
• Mining companies pay 10% of the royalty for leases granted after January 12, 2015, and 30% for leases granted before this date.
• State Government Role:
• State governments are required to develop and notify the State DMF Rules, which outline the governance structure, fund utilisation priorities, and mechanisms for planning, monitoring, and implementing projects.
• Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY):
• The PMKKKY is implemented through the funds accrued to DMFs, focusing on the development of mining-affected areas.
Conclusion The report highlights significant issues with the management and utilisation of funds in DMFs, emphasizing the need for improved institutional frameworks, better planning, and greater local community participation to achieve the intended welfare outcomes for mining-affected regions. The potential future funds make it crucial to address these inefficiencies for long-term, sustainable development.
Source: https://www.thehindu.com/sci-tech/energy-and-environment/over-half-of-1-lakh-crore-collected-for-the-welfare-of-mining-districts-not-spent-report/article69378081.ece