A performance audit by the Comptroller and Auditor General of India (CAG) of the District Mineral Foundation (DMF) trusts and the implementation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) revealed that funds meant to compensate people bearing the environmental and social costs of mining in Odisha’s mineral-bearing districts were spent on a hockey stadium, government quarters, road widening, hospital digitisation, foreign university studies, and government vehicles.
The performance audit covering the period from 2015-16 to 2023-24 found that of the ₹10,104.28 crore spent in the six audited districts (Keonjhar, Sundargarh, Jajpur, Mayurbhanj, Dhenkanal and Nabarangpur), only ₹5,477.75 crore, or 54.21%, went to directly affected areas while the rest went to indirectly-affected areas as well as areas not affected by mining. The report was laid in the state assembly on Monday.
In March this year, HT first reported draft findings of the CAG report on DMF expenditure.
As per state DMF rules, at least 60% of available funds must be spent in areas directly affected by mining, while spending in indirectly affected areas is capped at 40%. There is no provision for spending DMF money in areas unaffected by mining.
The CAG audit found that in Jajpur district, only 36.6% of the ₹1,164.43 crore spent went to directly affected areas, while 43.54% was spent in indirectly affected areas.
{{/usCountry}}The CAG audit found that in Jajpur district, only 36.6% of the ₹1,164.43 crore spent went to directly affected areas, while 43.54% was spent in indirectly affected areas.
{{/usCountry}}Similarly, Keonjhar spent 54.32% of its ₹4,410.10 crore expenditure in directly affected areas, while Sundargarh spent 58.9% of ₹4,386.71 crore, both below the 60% requirement.
The audit also found that officials in Keonjhar, Sundargarh and Jajpur used an administrative classification called “common affected areas”, which the CAG said was not recognised under the Mines and Minerals (Development and Regulation) Act, PMKKKY guidelines or Odisha’s DMF rules.
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A total of ₹2,578.73 crore, or 25.52% of expenditure examined in the three districts, was classified under the category.
In Keonjhar, 1,352.78 crore rupees, or 30.67% of expenditure, was classified as a common affected area, while Sundargarh recorded 994.65 crore rupees, or 22.67%, under the same classification.
In Keonjhar and Sundargarh districts, ₹983.32 crore was spent in 976 villages classified as non-affected by mining where projects such as mini-stadiums, block-level office quarters, conversion of single-lane roads into intermediate-lane roads and digitisation of urban hospitals were taken up.
At the same time, 488 directly affected villages in Keonjhar and Sundargarh received no DMF-funded project during the nine-year period. In several mining villages, Gram Sabhas identified basic needs but their proposals were not acted upon.
The audit also revealed that Sundargarh DMF spent ₹136.77 crore on the Rourkela International Hockey Stadium ahead of the 2023 Men’s Hockey World Cup, and Jajpur DMF spent ₹113.65 crore on a regional science academy in Panikoili.
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Keonjhar DMF sanctioned ₹6.06 crore to sponsor five students for a master’s course in mining engineering in a university in Australia. Jajpur spent ₹4.30 crore on coaching by private institutes for medical entrance examinations.
The DMFs also spent ₹59.13 crore on protective equipment for 44,120 workers employed by private and public-sector mining and industrial companies while another ₹51.71 crore was spent on rural parks and eco-retreat centres in Jajpur and Keonjhar which are still incomplete, poorly maintained or defunct.
The CAG also flagged ₹129.89 crore spent on school furniture under areas covered by the state government’s 5T High School Transformation Programme. In some locations, desks were found lying in locked classrooms because hostel buildings had not been completed.
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In Sundargarh district, ₹25.01 crore from administrative funds was spent on police patrolling vehicles, renovation of municipal offices and refurbishment of a reading room at the district collector’s residence,
Despite the six audited DMFs collecting more than ₹22,500 crore, none had established an Endowment Fund-- a mechanism intended to provide sustainable financial support to mining-affected communities after mines close, the CAG said.