The Standing Committee on Coal, Mines and Steel noted that only 10 states have incorporated the 2024 norms into their DMF rules, despite repeated reminders from the Ministry of Mines. It said the lack of compliance was a serious concern that risked creating uneven standards in the implementation of welfare projects across the country.
These 10 states are Goa, Gujarat, Himachal Pradesh, Jharkhand, Maharashtra, Odisha, Rajasthan, Telangana, Uttarakhand and Andhra Pradesh.
The revised PMKKKY guidelines tighten the utilisation of DMF funds by prioritising high-impact projects in drinking water, healthcare, education, and livelihoods, while restricting spending on non-essential infrastructure.
They mandate beneficiary targeting, stronger oversight and transparency, social audits, and convergence with central and state schemes to avoid duplication. The guidelines also stress time-bound project execution and outcome-based monitoring.
In 2015, the Mines and Minerals (Development and Regulation) Act, 1957, was amended to establish DMF in all districts affected by mining operations. The objective of DMF is to work for the interest and benefit of people and areas affected by mining-related operations.
The committee said the revised guidelines mandated the formation of state-level monitoring committees to strengthen oversight, which several states have failed to do.
Pointing to inequity in fund accumulation, the committee noted that as of June 2025, the cumulative DMF collection across 106 aspirational districts stands at Rs 34,768 crore, with Rs 26,955 crore sanctioned and Rs 18,491 crore spent.
However, the distribution of DMF funds in these aspirational districts is highly uneven. Eighty of the 106 districts have a cumulative collection of Rs 100 crore or less, reflecting low mining activity and, consequently, limited annual fund inflows.
Raising governance issues, the panel reiterated its recommendation that elected Members of Parliament should head DMF governing councils and rejected the government’s position that district collectors should continue to chair both governing and implementing bodies. It argued that vesting both roles in the collector compromises separation of powers and weakens accountability.
The report also highlighted substantial utilisation gaps. Out of 3.69 lakh sanctioned projects financed through DMF, only 2.08 lakh have been completed, leaving nearly 44 per cent of projects unfinished.
The committee further expressed concern over instances of DMF funds being diverted by some states, noting that the ministry could not furnish consolidated figures of such transfers, underscoring gaps in tracking and oversight.
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