The Indian government has introduced stricter guidelines governing the expenditure of district mineral foundations (DMF) to enhance their efficiency and transparency. The new measures aim to ensure that funds allocated to DMFs are effectively utilized for welfare activities in mining-affected districts. Senior officials have indicated that states failing to comply with these governance rules could face a halt in fund disbursal.
The Union Mines Ministry has been empowered to investigate any non-compliance with DMF rules, particularly those mandating the use of funds for local welfare initiatives. A senior official highlighted the need to address mismanagement issues, stating, “There are reports of DMF expenditure not being very well managed in some states. We want to plug the loopholes.”
DMFs, which operate like trusts set up by state governments in mining-affected districts, are funded by contributions from mining companies. These statutory authorities are tasked with managing and deploying funds for community welfare. States are expected to take prompt action against any instances of fund mismanagement.
To enhance accountability, the Centre has established a complaint mechanism allowing it to order investigations and potentially suspend fund disbursals if states violate DMF rules. Currently, DMFs have been established in 645 districts across 23 states, and these entities have their respective DMF rules in place.
Official data reveals that ₹90,027.19 crore has been collected under DMF since its inception, with ₹57,098.24 crore already utilized. This funding has facilitated the completion of 181,433 projects, worth ₹29,848.41 crore, aimed at improving the lives of those in mining-affected regions.
The push for stricter monitoring comes after multiple Members of Parliament raised concerns about the misuse of DMF funds for non-developmental activities. In response, the Centre has implemented more rigorous oversight measures, including audits by the Comptroller and Auditor General (CAG) of India. While the CAG has previously conducted audits of DMFs at the state level, the current exercise is broader in scope, assessing the implementation and impact of DMFs nationwide. There is a push for stricter monitoring of DMF funds for non-developmental activities.
Mining companies are required to contribute to DMFs through an amendment to the Mines and Minerals (Development and Regulation) Act, 1957, which was established in 2015. With these new guidelines, the government aims to ensure that DMF funds are used effectively to benefit the communities most affected by mining activities.
