Over half of Rs. 1 lakh crore collected for welfare of mining districts not spent

Context

•A first-of-its-kind analysis of the District Mineral Foundations (DMF) shows that despite collecting about ₹1-lakh crore in the past decade, more than half the funds is unspent.

• Moreover, the funds are often diverted to activities that are not directly linked to the welfare of mining districts — a contravention of the Centre’s guidelines.

• The DMFs are non-profit trusts set up in mining districts and tasked with ensuring that a portion of the revenues generated from mining is spent on the development of the districts.

• Odisha accounts for the highest share of DMF funds, about 29% (₹30,126 crore) of the country’s total, followed by Chhattisgarh (₹14,564 crore) and Jharkhand (₹13,791 crore).

• “The prime focus of DMF and PMKKKY is to alleviate poverty and deprivation, which requires a balanced investment in human resources and infrastructure.

District Mineral Foundations (DMF) Funds

• As per the Mine and Minerals Development Regulation (Amendment) Act, 2015, in every district affected by mining-related operations, the state government shall, by notification, establish a trust as a non-profit body to be called the District Mineral Foundation

• This fund will be used for welfare of the people affected in the mining affected areas.

• In Keonjhar, the total DMF fund collection has touched an astounding ₹8,840 crore, the highest for any district in India.

• The idea behind the contribution is that local mining-affected communities, mostly tribal and among the poorest in the country, also have the right to benefit from natural resources extracted from where they live.

• The functioning of the DMF trusts and the fund use governed by states’ DMF Rules incorporate the mandates of a central guideline, Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).

Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)

• The Ministry of Mines launched PMKKKY in 2015 for the welfare of areas and people affected by mining-related operations, using the funds generated by DMFs.

Objectives:

• to implement various developmental and welfare projects in mining-affected areas, complementing the existing ongoing schemes of the State and Central Government;

• to minimize/mitigate the adverse impacts, during and after mining, on the environment, health, and socio-economics of people in mining districts; and

• to ensure long-term sustainable livelihoods for the affected people in mining areas.

Implementation:

• It will be implemented by the DMFs of the respective districts using the funds accruing to the DMF. The MMDR Amendment Act, 2015, mandated the setting up of DMFs in all districts in the country affected by mining related operations.

• The Central Government has notified the rates of contribution payable by miners to the DMFs.

• In case of all mining leases executed before 12th January, 2015 miners will have to contribute an amount equal to 30% of the royalty payable by them to the DMFs. If mining leases are granted after 12.01.2015, the rate of contribution would be 10% of the royalty payable