District Mineral Foundations: Centre likely to authorise independent study

Centre has advised states that the money collected by DMFs should be used in just two or three schemes for proper utilisation of funds, The Indian Express had reported in May.

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These bodies have been established under Mines and Minerals (Development and Regulation) Amendment Act, 2015, also known as MMDRA Act, 2015.

The Central government is likely to authorise a study by an independent agency on the “effectiveness of utilisation of the funds” that have been provided to District Mineral Foundations (DMFs), the district-level bodies established under the new mining law to benefit local people affected by mining operations.

These bodies have been established under Mines and Minerals (Development and Regulation) Amendment Act, 2015, also known as MMDRA Act, 2015. “The Centre has got some reports recently that that the money allotted to these bodies is not being used properly. The intended beneficiaries are not getting complete benefits of crores that have been given already. Therefore, the Centre is likely to ask an independent agency to study the effectiveness of utilisation of the funds,” said a senior government official on the condition of anonymity.

In May, The Indian Express reported that Centre had advised states that the money collected by DMFs should be used in just two or three schemes so that there is proper utilisation of funds.

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State governments — flush with DMF funds — are allocating money to thousands of schemes/projects. For example, till November 30 last year, Chhattisgarh and Jharkhand collected Rs 2,331 crore and Rs 2,314 crore, respectively. Chhattisgarh has started 43,484 schemes or projects while Jharkhand has begun 2,07,173 schemes/projects.

“As the state governments have started allocating amounts to so many schemes or projects, we think that the funds will either remain unutilised or get pilfered by junior officials. So, we have advised the state governments to focus on just two or three schemes properly. It will help in proper utilisation of funds,” a Central government official had told to The Indian Express in May this year.

Chhattisgarh’s 43,484 schemes are spread across sectors such as drinking water supply, environment preservation, pollution control, health and education, among others. Out of around 2 lakh projects of Jharkhand, 761 are related to drinking water and sanitation and 52 are for the health sector. About 99 per cent of Jharkhand’s are for open-defecation free villages.

While 12 mineral-rich states have collected Rs 13,398 crore for their DMFs, they spent only 17 per cent of the amount till the end of 2017. As on November 30, 2017, Madhya Pradesh, Rajasthan, Maharashtra and Andhra Pradesh spent just 10.83 per cent, 20 per cent, 9.03 per cent and 13.97 per cent of the funds, respectively. Madhya Pradesh established its DMF for major minerals on May 15, 2015. Rajasthan, Maharashtra and Andhra Pradesh established DMFs for major and minor minerals on May 31, 2016, September 1, 2016, and June 27, 2015, respectively.

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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.