States slow to identify projects, spend funds under Mineral Foundation

Data posted on the Ministry of mines website shows 21 mineral rich states have barely been able to expend 36% of the funds approved under DMF

Mineral rich states have shown a sluggish tendency to identify projects under District Mineral Foundation (DMF) and implement them. The slow pace of project execution has left a major portion of the sanctioned funds unused.

Data posted on the Ministry of mines website shows 21 mineral rich states have barely been able to expend 36 per cent of the funds approved under DMF. As on August 2019, out of Rs 26,685.48 crore allocated under the rubric of DMF, only Rs 9,554.87 crore has been spent by states.

Lack of identification of key projects that will benefit the people affected by mining operations and their slow execution has been the stumbling block. Though 133,214 projects have been identified, 23,804 of them have been non-starters. And despite 45,523 projects having been completed, the record is still patchy as 6,538 projects have been scrapped.

Barring Chhattisgarh, all other states seemed to have dragged their feet on DMF projects implementation. By the end of August this year, Chhattisgarh had used Rs 2,929.79 crore, utilising 66 per cent of Rs 4,398.66 crore approved.

DMFs have been created in each mineral producing district under the provisions of the amended Mines and Minerals- Development & Regulation (MMDR) Act, 2015. They are funded by contributions from the miners. Older mines have to fork out 30 per cent of the royalty while newer mines obtained through the auctions route after January 12, 2015, the date of enactment of MMDR Act pay 10 per cent of the royalty.

Given the patchy record in the use of DMF funds, a Parliamentary panel had last year urged the Centre to formulate a monitoring mechanism for surveillance. More often, the projects identified under DMF did not benefit the people displaced or affected by mining activities. Misplaced or skewed priorities in project identification and fund utilisation left the potential beneficiaries in the lurch.

In its report released a year ago on the skewed priorities in spending of DMF money, Delhi-based non-profit organisation Centre for Science & Environment (CSE) noted that the DMF is deviating from its people-centric objective and is failing to serve the intended beneficiaries. “Both in terms of administration and fund use, it is increasingly becoming indistinguishable from any other general development fund. The most problematic aspect is that some of these are also going against the spirit of the legal provisions guiding DMF”, the report said.