Context
The Comptroller and Auditor General of India (CAG) has flagged irregularities in the use of District Mineral Foundation (DMF) funds in Odisha.
About District Mineral Foundation (DMF)
- Legal Basis: Section 9B of the Mines and Minerals (Development and Regulation) Act, 1957, introduced through the 2015 amendment.
- Establishment: State governments establish DMFs as non-profit trusts in districts affected by mining.
- Objective: To support the welfare and development of mining-affected people and areas.
- Governance: State governments prescribe their composition and functions.
- Funding: Mandatory contributions from mineral concession holders, including mining leaseholders, calculated as a percentage of royalty (payment made by mineral concession holders for extracting minerals):
-
- Pre-12 January 2015 leases: 30% of royalty.
- On or after 12 January 2015 leases: 10% of royalty.
Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)
- Launch: Introduced by the Ministry of Mines in 2015 to use DMF funds for the welfare of mining-affected communities.
- Objectives: Mitigate mining-related environmental, health and socio-economic impacts; improve basic services and infrastructure; and promote sustainable livelihoods by complementing existing Central and State Government schemes.
Fund Allocation and Priority Sectors
Under the revised PMKKKY guidelines (January 2024), DMF funds are allocated as follows:
- High-priority sectors — At least 70%: Drinking water, healthcare, education, environmental protection, sanitation, housing, welfare of vulnerable groups, skill development, livelihoods, agriculture and animal husbandry.
- Other priority sectors — Up to 30%: Physical infrastructure, irrigation, energy development and watershed development.
FAQs
Q1. What is the legal basis of DMF?
Ans. DMF is established under Section 9B of the Mines and Minerals (Development and Regulation) Act, 1957, as amended in 2015.
Q2. Who establishes and governs DMFs?
Ans. State governments establish DMFs as non-profit trusts and prescribe their composition and functions.
Q3. How are DMFs funded?
Ans. They receive mandatory contributions from mineral concession holders in addition to royalty payments.
