Introduction :- 

DMF was instituted in March 2015 through an amendment under the Mines and Minerals (Development and Regulation) Act, 1957. Section 9(B)(1), of the MMDR (Amendment) Act,2015 provides for setting up of DMF as a non-profit Trust in every mining district and stipulates miners to pay a part of their royalty for the well being of mining affected people so that they too can benefit from natural resources in their areas.

Recently, Centre for Science and Environment (CSE) released the District Mineral Foundation (DMF) Status Report, 2018, which highlighted several shortcomings in the implementation of DMF scheme.

Significance behind establishing DMF :-

• Aimed to address the ironic inequality of India’s mining affected districts where the richest lands are inhabited by some of the poorest and most deprived persons and to ensure socio- economic and environmental justice for them by maximizing the welfare and benefit of the mining-affected people and areas in a targeted manner.
• Recognizes the right of the people to benefit from natural resources: It is a people-centric vision of natural resource governance where their right to benefit has been put at the forefront.
• Has defined objectives, specific beneficiaries and geographies (directly and indirectly mining-affected areas) and certain ‘high priority’ issues to focus on for intervention: The high priority issues, towards which at least 60 per cent of the DMF budget should be used, include drinking water supply, sanitation, healthcare, education, welfare of women and children, welfare of aged and disabled, skill development, environment preservation, and pollution control measures. Some states have also specified other sectors such as agriculture, affordable housing.

Issues with the DMF operation 

• No DMF trust has identified its beneficiaries: The beneficiaries of the mining affected areas have not been identified by any of the trusts.
• Excessive control by State Governments: There was too much state government intervention in deciding DMF fund utilization even though DMF rules and Central Government’s flagship scheme- Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) categorically emphasize the role of Gram Sabha.
• Telangana in June 2018 even amended its DMF rules to withdraw participation of Gram Sabha from the DMF body.The Chhattisgarh DMF Rules has created a “Settlor” - the Secretary of Mines - who has over-riding powers to include or scrap any project. In seven out of twelve states reviewed under the study, DMF body was dominated by Government officials and political executives- MLAs, MPs or in some cases elected Panchayat members. However, there was no representation of mining affected people.
• Misplaced allocations of DMF resources: This results in by-passing key issue areas of the affected districts such as healthcare or nutrition. For instance, in Odisha’s Sundergarh district where under five mortality rates in rural areas are very high and nearly 50% children below five have stunted growth, only Rs. 3 Crore is provided for Child development out of district’s Rs. 745 Crore sanctions. Similarly, spending is diverted to various construction activities in Urban areas such as 46% of total DMF sanctions in Chhattisgarh’s Korba district is used for works in urban areas which include education hub, roads, urban sanitation works, multilevel parking lots, bus stops etc.  In Odisha’s Jharsuguda, 96% of health sector sanctions are being spent to construct a medical college in Keonjhar town.
• Lack of planning and ad-hoc investments are one of the biggest drawbacks in most districts, resulting in many cases districts leaving out people and areas worst hit by mining from DMF fund allocation, for instance, in Jharkhand’s Dhanbad district’s Jharia coal mine region, which is one of the worst affected areas in the district, no fund is allocated at all from DMF sanctions.
• Absence of proper administrative setup: except for a handful of three out of 50 districts studied, no DMF has setup an office for planning and coordination, engaging concerned officials and experts. DMFs are operating in an ad hoc manner with intermittent meetings of DMF bodies where decisions on sanctions are being made. Some districts (as in Odisha and Jharkhand) have engaged private consultants to oversee DMF implementation.
• Indifferent attitude of the state governments: Governments in 11 states have issued notifications establishing DMF as a Trust, but the notifications do not essentially elaborate on the composition and functions of the Trust or the rights of the beneficiaries. Gujarat is an exception in every aspect as it does not recognize DMF as a Trust and establishes it as a ‘society’.
• Lack of transparency and accountability: Public disclosure of information is the key to ensure accountability, however, except for Odisha and Chhattisgarh, no state has a proper DMF website. Also no audits have happened for most DMFs. Even for the few districts where it has happened, such as in Chhattisgarh and Odisha, so far financial audits have only happened once and no performance evaluation or social audit essential for public schemes has ever been undertaken.

About Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)

• PMKKKY is a programme launched in September 2015 to provide for the welfare of areas and people directly or indirectly affected by mining related operations. PMKKKY is implemented by the District Mineral Foundations (DMFs) of the respective districts using the funds accruing to the DMF from miners. The overall objectives of PMKKKY scheme are: to implement various developmental and welfare projects/programs in mining affected areas. These projects/programs will be complementing the existing ongoing schemes/projects of 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.

Way Forward :

• If developed and implemented well, DMFs not only have a huge potential for improving the lives and livelihoods of some of the poorest communities but they could also be a model for inclusive governance.
• State governments must provide districts the flexibility to plan and invest on the needs of the local communities. The intended autonomy of DMF Trusts should be maintained.
• A systematic and bottom-up planning approach must be followed to make investments effective. The potential can also be improved by considering convergence with other programmes of the Central and state governments once priority issues are determined.
• Districts must identify DMF beneficiaries; there cannot be a Trust without beneficiaries. This will also help in targeted investments such as for addressing women and child development issues.
•  Gram Sabhas (and ward members where applicable) should have a representation in the DMF body. Not following this is in contravention to the spirit of the DMF law as well as the state DMF Rules.
• For efficiency of operations, all DMFs must have an office comprising of officials and experts. Independent organizations/planning experts can be roped in from time to time for effective planning.
• Public disclosure of information is key to DMFs’ transparency of operation. District-specific DMF-related information must be made available through a website. To ensure access, information should be shared by using panchayat-level platforms.