Tussle over utilisation of Rs 23,000 crores of district mineral foundation fund towards Covid-19 relief aid

The Economic Times | April 19, 2020

Delhi-based non-governmental organization, Prahar (public response against helplessness and action for redressal) on Sunday, urged the government to use the unutilised amount of Rs 23,510 crores from the state-owned district mineral foundation fund as part of relief aid to the ongoing Covid-19 outbreak, while Goa Foundation, an NGO based in Goa has opposed the idea.

“A corpus of Rs. 23510 crores of unutilized DMF fund is available which if liquidated can bring great relief to the people in mineral states at a time of a national crisis,” said Prahar in a statement.

On March 26, 2020, the Finance Minister Nirmala Sitharaman during an announcement, urged DMF funds to be used to supplement and augment healthcare facilities, screening and testing requirements and any other resources that might be required by the state governments.

Due to lack of clarity, after 3 weeks only negligible progress has been made with few districts making some use of these funds, the NGO said.

Yet another NGO, Goa Foundation, has however opposed the use of DMF funds and iron ore permanent fund in Goa’s fight against Coronavirus.

The NGO in the letter to the Chief Secretary, Government of Goa wrote that the central government has no right to allocate these funds for saving lives in these extremely troubled times.

Monies placed in the DMFs are, by law, only allowable to support activities that enhance the welfare and opportunities of persons directly affected by mining in mining districts…Hence, by no stretch of the imagination of the law, can the funds meant for them and their communities be used for government activity related to the Covid-19 pandemic, Goa Foundation said in a statement.

“It is not a welfare approach to let the spirit of an act be clouded under the letter of the law”, it added.

Mines and minerals development and regulation Act 1957, mandates the State Governments to establish District Mineral Foundation (DMF) in each district affected by mining related operations.The object shall be to work for the interest and benefit of persons, and areas affected by mining related operations.

DMF fund collection in some key states include Odisha with Rs. 9501 crore, Karnataka Rs. 1842 crore, Goa Rs. 188 crore, Assam Rs. 80 crore, Meghalaya Rs. 48 crore and West Bengal Rs. 43 crore till date.

“Goa collected Rs. 188.65 crore in DMF Fund and Rs. 399 crores in Goa Iron Ore Permanent Fund till March 2018 when mining was operational. Out of this only 2% or Rs. 4 crore of DMF fund has been used for the welfare of people. At a time when the state is in its worst crisis, this corpus can act as a bail-out package”, according to Prahar

Goa Foundation has called utilisation of these funds for life saving purposes as “raid on financial resources” by state and the centre and termed the decision of using DMF fund as “illegal decisions” and threatened consequences.

Commenting on this, Prahar’s, National Convenor and President, Abhay Raj Mishra said, “Heartless opposition by institutions with a mindless goal should be stopped immediately as it exposes their true intentions”.

“The Central Government does not have any power to approve diversion of such funds. Neither is there a provision in the MMDR Act which allows such approvals by the Central government,” Said Goa Foundation’s Director, Claude Alvarez.

According to the amended minerals act, 40% of the DMF fund can be used for ‘other priority areas’ whereas 60% should be reserved for the ‘priority areas’. This means that while 60% of the fund can be kept for communities directly working in mining activities, the remaining can be used for the wellbeing of the state.