Wednesday, Nov 30, 2022

Complete audits of District Mineral Foundations by the end of 2018: Centre to state govts

Goa, Bihar, Kerala, Meghalaya, Tamil Nadu pulled up for ‘very low’ fund spending

The central government has asked the states to complete their respective audits of District Mineral Foundations (DMFs), the district-level bodies established under the new mining law to benefit local people affected by mining operations, by the end of 2018.

Moreover, the central government has pulled up the state governments of Goa, Bihar, Kerala, Meghalaya and Tamil Nadu for spending “very low” amount of funds, which have been collected under DMFs.

“Union mines secretary mentioned that audit of DMFs is very important and asked all states to initiate the audit process. Some states like Chhattisgarh and Gujarat, have identified and hired the chartered accountants empaneled by Comptroller and Auditor General of India to carry out audit of DMFs. The audits of DMF till the financial year (2017-18), should be completed by December 2018 for all states,” stated the minutes of the Coordination-cum-Empowered Committee (CCEC) meeting that took place in Ahmedabad on October 12.

Officials of mines and minerals departments of various mineral-rich states participated in the CCEC meeting that was chaired by Union Mines Secretary Anil Mukim. Officials belonging to Goa, Bihar, Kerala, Meghalaya and Tamil Nadu explained to Mukim why they have been able to spend only low amounts of funds collected under the DMFs.

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“Daulat A Hawaldar, Secretary, Goa mentioned that the implementation of projects under DMF, has already commenced, however, expenditure had not been booked yet. Anand Prakash Sinha, Deputy Director of Mines, Bihar, mentioned that it has undertaken the program in four districts and has completed the same in one district,” the minutes of the meeting stated.

As per the data of Union mines ministry, Goa has collected Rs 186.6 crore under its DMFs as on October 1. However, Goa has not been able to spend anything as on October 1. Similarly, mines ministry data shows that Bihar has been able to collect Rs 39.94 crore for its DMFs but it has not spend anything as on October 1. DMFs have been established under Mines and Minerals (Development and Regulation) Amendment Act, 2015, also known as MMDRA Act, 2015.

High priority sectors like drinking water supply, health care, sanitation, education, skill development, women and child care, welfare of the aged and disabled people, skill development and environment conservation will get at least 60 per cent share of the DMF funds, as per the rules. For creating a “supportive and conducive” living environment, the mining rules state that the remaining DMF funds will be spent on making roads, bridges, railways, waterways, irrigation facilities and alternative energy sources.


“Sanjay Kaul, Secretary Mines, Kerala mentioned that the DMF rules were framed recently in May 2018 and DMF are expected to be formed by the end of October 2018 after which the expenditure is expected to progress.P L Lawai, Joint Secretary, Meghalaya said that the state is proposing to start implementing projects shortly. S Sudarsanam, Joint Director, Tamil Nadu stated that 52 per cent of the funds have been allocated to various projects,” the minutes of the October 12 meeting added.

According to Union mines ministry data, Kerala has collected Rs 7.75 crore but has spent nothing as on October 1. Meghalaya has not collected any money for its DMFs as on October 1, according to this data. Tamil Nadu has collected Rs 327.35 crore but has spent just Rs 4.98 crore as on October 1, stated the Union mines ministry data.

Most districts affected by mining operations are extremely poor and without basic amenities such as clean water, schools and hospitals.


Any mining licence or composite licence (prospecting licence-cum-mining licence) can be granted by state governments only through the auction route, the Act states. Such a licence-owner company has to pay the DMF — established in the districts where it is mining — an amount equivalent to 10 per cent of the royalty. However, under the old mining law, licences were granted on a discretionary basis by the state governments. The companies with such licences have to pay an amount equivalent to 30 per cent of the royalty towards DMFs.

First published on: 04-11-2018 at 02:01:35 am
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