Don’t divert funds meant for mines-affected community: Odisha govt to collectors

Updated on May 01, 2022 09:37 AM IST

The District Mineral Foundation Funds scheme in Odisha has been beset with allegations of misuse and diversion of funds .

The central government started the District Mineral Foundation Funds scheme in 2015 as a benefit-sharing scheme with the mining-affected communities. (HT File Photo)
The central government started the District Mineral Foundation Funds scheme in 2015 as a benefit-sharing scheme with the mining-affected communities. (HT File Photo)

BHUBANESWAR: Amid allegations of misuse and diversion of District Mineral Foundation (DMF) funds for works in non-mineral bearing areas, the Odisha government has asked all departments and district collectors of the state to ensure that no fund meant for mining-affected communities is transferred in any manner from the DMF to the state exchequer or any state level fund or Chief Minister’s Relief Fund, according to a new directive.

In a letter to all the departments and district collectors, development commissioner PK Jena wrote that the September 2021 circular of the Ministry of Mines on the DMF funds use as per section 9(B) of the MMDR Amendment Act, 2015 be strictly adhered when it comes to utilisation of money from the special fund.

The central government started the District Mineral Foundation Funds scheme in 2015 as a benefit-sharing scheme with the mining-affected communities under which the mining companies pay 30 percent of the royalty amount for leases granted before 2015 and 10 percent for the leases granted through the auction mechanism post-2015. DMF funds are non-profit and independent trusts linked to the Pradhan Mantri Khanij Kshetra Kalyan Yojana. DMF implements various welfare programmes for the mining-affected communities and the environment. At least 60 percent of the DMF funds should be utilised for high-priority areas.

However, the scheme has been beset with allegations of misuse and diversion of funds in Odisha, that has collected the largest amount of funds since the scheme started. Till January this year, Odisha collected 16,952.64 crore under DMF, around 28.7 per cent of the total DMF funds collected in the country. Though it has spent 8,515.71 crore, a or a little more than half of the amount, a study by the Centre for Social and Economic Progress on the use of District Mineral Foundation Funds published in January this year found that the state ranked at No. 5 when it came to Utilisation Index, a measure of how well the funds have been spent across various sectors. Odisha was ranked behind Chhatisgarh, Gujarat, Telangana and Karnataka.

Political leaders and NGO workers in the mining-affected districts said though Odisha has spent half of the funds it collected, most of the money was being diverted to projects which do not meet the criteria.

In March last year, the state cabinet approved the State Level Sports Infrastructure Development Project worth 356.38 crore for expansion of Kalinga Stadium Sports Complex in Bhubaneswar and construction of a new international hockey stadium in Rourkela for the 2023 Men’s Hockey World Cup, half of which would be spent from the DMF funds. In the mineral-rich Keonjhar, the district administration in 2019-20 sanctioned works for a handball stadium from the DMF funds. In January 2020, Sundergarh district administration bought 25 cars with the DMF funds for use as patrolling vans by Rourkela police. In 2017, the Jharsuguda district administration sanctioned 20 crore from the DMF funds for the Jharsuguda airport.

“The provisions of Section 9(B) of the MMDR Act would be strictly adhered to in respect of utilisation of funds by the District Mineral Foundation. No sanction or approval of any expenditure out of funds of the District Mineral Foundation would be done at the State level by the State Government or any state level agency. The above of government of India are to be followed scrupulously and only such projects sanctioned by the District Mineral Foundation Trust Boards for the respective District are to be implemented in accordance with the provisions of Odisha District,” Jena wrote.

Bharatiya Janata Party (BJP) MLA in Keonjhar, Mohan Majhi said the latest directive from the government to the district collectors may just remain another letter without its implementation. “The DMF fund is supposed to cater to a specific developmental need of mine-affected areas that can’t be dealt with in regular budgeting. But what we are seeing in Keonjhar is the use of the funds for mega drinking water projects which can be funded by normal budgeting. The Keonjhar medical college and hospital being built now has been funded by DMF which can easily have been funded by routine funds from central and state government schemes,” said Majhi.

Noted environmental lawyer Sankar Pani said though DMF funds are supposed to be used for minimising adverse impacts during and after mining on the environment, health and socio-economics of people in mining districts and to ensure long-term sustainable livelihoods for affected people in mining areas, none of the aims have been achieved in any of the districts. “In a district like Keonjhar where 30 per cent of the area has been mined for minerals like iron ore and manganese, the tribals at the receiving ends of the pollution can’t get treated in any of the dispensaries started by the mining companies. The first point of treatment in the district is a PHC which remains non-functional. What is the point of building a medical college and hospital far away from the mining areas which the poor tribal can’t reach,” asked Pani.

BJP MLA in Sundargarh, Shankar Oram said the people in the mining areas had high hopes that DMF funds would help better their lives. “From Hemgiri to Koira, a number of mining activities involving coal, iron ore, manganese, lime stone are going on. But people in these areas are still deprived of primary education, primary health, drinking water, road connectivity and electricity,” he said.

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