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No improvement in mineral fund use under Centre’s oversight

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Till March 2021, a total of Rs 31,212 crore, or just around half of the Rs 61,868 crore collected under the DMF since its inception, has been spent on the welfare of those affected by mining activities, including the tribal population.

Though the Centre took complete control of the district mineral foundations (DMFs) from the states with effect from July last year, mainly to rein in diversion of funds, the utilisation of the funds has not improved much.

The DMF, created in 2015 with legal sanction, is meant for the welfare of mining-affected people.

Till March 2021, a total of Rs 31,212 crore, or just around half of the Rs 61,868 crore collected under the DMF since its inception, has been spent on the welfare of those affected by mining activities, including the tribal population.

This compares with 48.5% spent of the total Rs 50,500 crore collection till July 15, 2021.

The Centre took complete control of the DMF funds through an order issued on July 12 last year.

The Union mines ministry had then said the move was necessitated as “there are instances where a part of the funds of the DMF are being transferred to the treasury/consolidated fund of the state or state-level funds (by whatever name called) or Chief Minister’s Relief Fund or other funds or schemes”, thereby “defeating the very purpose” of the creation of the DMF.

The Centre’s unhappiness with the way the states were using the DMF kitty came to the fore in March 2020, as finance minister Nirmala Sitharaman suggested, as part of the first tranche of the Atmanirbhar package: “We will request the state governments to utilise the funds which are available at the DMF at the district level so that medical testing, medical screening and also providing of health attention will not suffer.”

As on April 28, states have used Rs 1,460 crore to combat Covid-19 out of the fund.

According to the MMDR Rules, 2015, “every holder of a mining lease or a prospecting licence-cum-mining lease shall, in addition to the royalty, pay to the DMF of the district in which mining operations are carried on, an amount at the rate of 10% of the royalty in respect of mining leases or prospecting licence-cum-mining lease granted on or after January 12, 2015, and 30% of the royalty in respect of mining leases granted before January 12, 2015”.

The Act mandates that state governments must establish DMFs in all districts affected by mining-related operations. It also said state governments must establish DMFs in all districts affected by mining-related operations.

The DMF fund collections have been the highest in mineral-rich Odisha (Rs 17,907 crore), followed by Chhattisgarh (Rs 8,943 crore), Jharkhand (Rs 8,301 crore), Rajasthan (Rs 6,112 crore) and Madhya Pradesh (Rs 4,870 crore).

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