Odisha diverts DMF funds to urban areas as mining-affected communities suffer

India Mongabay | May 05, 2021
(i)Odisha is one of the mineral-rich states and has billions of rupees collected under the District Mineral Foundation (DMF) funds which according to the law are to be used for the welfare of the mining-affected communities.
(ii)Instead, the DMF funds are either being used for works that have nothing to do with the welfare of mining-affected communities like the creation of a stadium or diverted for urban areas.
(iii)Experts note that Odisha has more than Rs. 110 billion under the DMF funds but they are yet to find their way to the mining-affected communities.

During the latest budget Session of Odisha’s Legislative Assembly, the Odisha government’s Cabinet in March 2021 approved several proposals but the one that raised eyebrows was to use the District Mineral Foundation (DMF) funds, meant for the mining-affected community in the Sundergarh district, for construction of an international stadium in Rourkela town.

The proposed international stadium has been envisioned to host the Men’s Hockey World Cup 2023. This misuse of the DMF funds is not a one-off incident, but there have been many similar trends over the years. In 2017, in the Jharsuguda district, the district administration sanctioned works related to the power supply to the Jharsuguda airport with an investment of more than Rs. 20 crore (Rs. 200 million) squeezed from the DMF funds.

In another mining district of Keonjhar, the district administration in 2019-20 sanctioned works for a handball stadium, and invested around Rs 500,000 for a patient facilitation centre for Cuttack-based medical college which is around 200 kilometres away from Keonjhar.

In January 2020, the administration of the Sundergarh district bought 25 cars with the DMF funds for them to be used as patrolling vans by the police in Rourkela city, a non-mining affected area. Earlier, even integrated traffic management was sponsored with the DMF funds. In the same district, the DMF funds were also used to construct the boundary walls of the Circuit House.

The list of instances where the DMF funds were used for works that had nothing to do with the welfare of the mining-affected communities goes on. This, experts warn, is worrisome because this comes at a time when the state’s own people living in the mining-affected areas are crying for attention and seeking help for basic amenities in their areas after living in poor and vulnerable conditions for decades.

This is important because according to the Union Coal and Mines Minister Pralhad Joshi, Odisha has seen the highest collection of Rs. 11,984 crore (RS. 119.84 billion) as DMF collections from the miners operating in the state since the inception of funds in 2015.

The Odisha government recently told the state Assembly that the DMF collections in the state are rising in the state. While it was Rs. 395.44 crore (Rs. 3.95 billion) in 2015-2019, in 2019-20 the total annual collections stood at Rs. 3,079.20 crore (Rs. 30.79 billion).

Though Odisha has a significant amount of the DMF funds what is probably lacking is the provision of transparency related to their use. For instance, Rule 16 of the Odisha DMF Rules talks about sharing the annual report of the DMF trust on its website but hardly any annual reports have been uploaded online for several years.

Odisha’s DMF Rules mandates the usage of 60 percent of the funds in priority areas while 40 percent of them could be used in non-priority areas. The non-priority areas included investments in physical infrastructure, irrigation, energy and watershed development, afforestation and others.

Queries sent to P.K. Jena, who is the Odisha government’s secretary for the planning and convergence department, regarding the diversion of DMF funds for other purposes remained unanswered.

Pranav Sachdeva, a lawyer with the Supreme Court who has handled many mining cases in the apex court emphasised that Odisha and many states have attempted to dilute the very concept of the DMF funds by diverting it to areas other than the mining-affected areas.

“As mining firms grow, the local community impacted by mining does not get any benefit from the money collected … in fact the local environment is impacted too. But the governments often diverts these important resources away from the vulnerable community. They try to use the DMF funds for works where ideally budgetary allocations should have been used. These funds were planned for the upliftment of the affected community for their health, education, livelihood and others and many portions land in urban areas,” he said.

The pollution mess in the mining-affected areas of Odisha
According to the 2011 Census, about 1.62 million people (50 percent) in the Sundergarh district belong to Scheduled Tribes and many live in rural areas. This area is adjacent to the Chhattisgarh border and known for coal mining and other minerals for decades. But what is consistently ignored is the plight of the communities impacted by mining.

For instance, Naresh Meher, a resident of Ratanpur village in Gopalpur panchayat in Sundergarh district, said that people in his village are living in pathetic conditions due to mining taking place about 10 kilometres away. He said that the levels of air pollution, water pollution and sound pollution have taken a huge toll on his village.

“Around 3,000 trucks cross our village every day. Thick levels of dust often engulf our standing crops while polluted water is discharged from the handpumps. Several of the citizens here live with skin diseases, cancer and other diseases triggered by mining activities,” said Meher, who himself is tuberculosis (TB) patient.

But this is not the end of their poor fate as his village is now listed to be taken away for mining.

Social activist Suru Mishra from Sundergarh said that in the Hemgiri block in the district, a stretch of 25 kilometres of road connects the mining centres of Sundergarh with Chhattisgarh and passes through several villages but even then the roads are in extremely bad shape.

“You cannot walk on that road. Only trucks and heavy vehicles run on that road. There are very big potholes and the whole stretch gets waterlogged making it very difficult for the local communities to commute or for kids to use that to go to schools,” Mishra told Mongabay-India.

Both, Meher and Mishra, said that these areas and many other mining-affected areas need government attention to improve their standards of lives. They also said that the Hemgiri Community Health Centre (CHC) is still deprived of a digital X-ray facility and ultrasound facility and other medical facilities but the government has spent several portions of the DMF funds in boosting the District Headquarter Hospital (DHH), which is in an urban area.

The provision of DMF funds – to be collected from miners – were introduced in January 2015 by the government of India through an amendment in the country’s mining laws for all districts affected by mining-related operations.

In the Talcher region of the Angul district, the villagers living in areas close to the coal mining and coal washery units are left to suffer from the discharge of untreated water directly into the farmlands of the village. Similarly, in the Bansapal and Joda blocks of the Keonjhar district, the villagers are facing the crisis of polluted groundwater, a result of mining activities. This has also forced many women to walk for miles every day to fetch drinking water.

How Odisha’s DMF funds are being diverted for other purposes?
Experts working on the issue of mining in Odisha and other states claim that the DMF funds are now easily diverted for other priority areas and urban areas despite it being illegal and mining-affected communities crying for help.

Sankar Prasad Pani, a lawyer with the National Green Tribunal (NGT) said, “In districts like Keonjhar, the salaries of doctors are now being paid through the DMF funds which should ideally be coming from the state’s budgetary allocations.”

“Collectors find the DMF funds sometimes hard to dispense and thus divert it for numerous urban-centric works. But they are not annual budget funds, they can be accumulated and do not lapse. They can be used when needed. The need is to make priority-based plans to aid the mining-affected people,” he said.

Ramesh Agarwal, a leading Indian environmentalist based in Raigarh in Chhattisgarh said, “The rules of DMF have been framed in such a way that the district collector gets the power to sanction the DMF funds with the approval of the local DMF committee. In many states, we have seen diversion of the funds to other areas which is not going to affect the mining hit communities,”

A study conducted by the New Delhi-based think tank Centre for Science and Environment (CSE) on the usage of DMF funds in different mining districts of Odisha found that despite lower social and health indicators the allocation of DMF funds on the issue of livelihood and other areas had not been much, say for example in Sundergarh district.

“In Sundergarh, one of Odisha’s top mining districts, a negligible Rs. 3 crore (Rs. 30 million) has been provided for child development out of the district’s Rs. 745 crore (Rs. 7.45 billion) sanctions. This is at a time when under five Mortality Rate in rural areas of the district is as high as 67, and nearly 50 percent of the children below this age are victims of stunted growth,” the report said.

Srestha Banerjee, Programme Head, International Forum for Environment, Sustainability & Technology (iFOREST), who played a key role in producing the CSE report, said the constitution of the DMF committee in the districts is one of the main problems.

“The DMF Committee in the districts have been formed in such a way that the local politicians including the parliamentarians and legislators exert more power in the decision making on the spending of the DMF funds in their areas. The mining laws permit the administration to use part of the DMF funds for administration works, but when the mining hit communities need attention for their upliftment and diversion of these funds to urban areas and for other similar works sounds less logical,” Banerjee told Mongabay-India.

She said that livelihood and income generation of the rural poor population living in the mining-affected areas need to get a priority under the DMF fund allocations. She also demanded that the DMF funds should be spent based on priority areas rather than in a haphazard manner as it is happening presently in many mining districts of Odisha.

Haryana Cabinet nod to policy for sale of shops/houses by municipal bodies

The New Indian Express | April 22, 2021

TO ENCOURAGE monetisation of locked properties of municipal bodies, Haryana government has made a policy for sale of shops/houses by municipal bodies, where possessions of such properties is with entities other than the municipal bodies or its predecessor for a period of 20 years.

The state Cabinet chaired by Chief Minister Manohar Lal Khattar on Thursday approved the policy, besides taking several other important decisions.

“There are a large number of properties in the shape of shops/houses which, though are presently owned by municipal bodies, are in possession of entities/individuals other than the municipal bodies for a period of 20 years or more. The municipal bodies find managing such properties difficult, particularly in view of the fact that the ownership/possession of such properties have, in several cases, changed hands on numerous occasions and the municipal bodies lack authentic documentation in this regard. Furthermore, several municipal bodies are unable to even recover the rentals of such properties,” the state government spokesperson said.

“On careful consideration, it was decided to transfer the ownership of these properties to such persons who are currently in justified possession of these properties. As per the policy, the shops/houses and other properties of municipal bodies which have been assigned to persons (other than the municipal bodies) for a period of 20 years or more shall be converted in the properties belonging to such of the persons, or shall be transferred in the ownership possession of such persons and also to sale such properties to such persons. This policy will not only strengthen the financial position of municipal bodies but will also grant small shopkeepers and other pattedar to the ownership of the said properties under their possession,” the spokesperson added.

Cabinet also approved the policy for transfer of municipal lands by charging consideration. “This policy would apply on the categories of properties/persons, where due to exigencies or otherwise, no approach road is available to the land owned by private individuals or entities.

In such cases, where no approach road is available to land owned or, as the case may be, held on lease for a minimum period of 30 years or more, by private individuals or entities and it is possible to provide approach access through the land owned by the respective municipal body, the respective municipal body shall provide land for being utilized for the purposes of constructing approach road (rasta) against the consideration equal to the market rate of the said land which is proposed to be transferred, provided that such transfer cannot be claimed as a matter of right and the decision of government, purely on the discretion of the government, on all aspects related to the transfer including shall be final,” the spokesperson added.

Other key decisions

Policy for homeless abandoned and surrendered children

Cabinet approved the Homeless Abandoned and Surrendered Children Rehabilitation Initiative Haryana (HARIHAR) policy for providing employment, educational and financial benefits to abandoned and surrendered children who have completed the age of 18 years from the childcare institutions of the state and were abandoned before the age of 05 years or surrendered before the age of 1 year.

The policy shall cover children admitted to childcare institutions before the age of 5 years (as abandoned) and before the age of 1 year (as surrendered) and who have completed the age of 18 years in childcare institutions, upto the age of 25 years, and who possess the required qualification.

“Also, to provide free school and higher education including technical education, skill development and industrial training and after care stay, rehabilitation and financial assistance upto the age of 25 years or marriage, whichever is earlier and one time interest free loan for purchase of a house in Haryana to abandoned and surrendered children who were admitted to childcare institutions before the age of 5 years (as abandoned) and before the age of 1 year (as surrendered), who have completed the age of 18 years while living in childcare institutions and have obtained admission in such courses,” the spokesperson added.

“In case an abandoned and surrendered beneficiary in after care gets a job on compassionate grounds, his/her salary will be deposited in a fixed deposit account and withdrawal will be allowed after attaining the age of 25 years or marriage or opting out of after care, whichever is earlier by such beneficiary. Such person will get upto 20 per cent salary advance from his/her own salary per month for his/her living expenses and will not be eligible for financial assistance. They will be provided one time interest free loan for purchase of a house in Haryana at the time of marriage,” the spokesperson added.

Uninstallation of toll

Cabinet approved uninstallation of toll on Punhana to Lakarpur, Sri Singalheri, Thenkri, Jalalgarh, Ranota-Manota upto Rajasthan border at 12.65 km in Nuh district.

Mining lease/contract rules amended

Cabinet approved amendments in the ‘Haryana Minor Mineral Concession, Stocking, Transportation Minerals and Prevention of Illegal Mining Rules, 2012’ and ‘Haryana District Mineral Foundation Rules, 2017’.

“As per the amendments, in case of mining lease/contract being granted through competitive bidding process, the highest bid received shall become the ‘annual dead rent’ or annual contract money payable by the lessee or contractors respectively. As per existing State Rules [Rule 9(3) and 22(2) respectively of the State Rules, 2012, the same is increased at 25 per cent on completion of each block of three years. The department proposed that rate of increase after every 3 years shall be reduced to 10 per cent as the existing rate is too high. Also, the request of mining contractors/lease holders seeking surrender [unconditional request] of lease/contract will be allowed subject to the condition that they submit application with no dues certificate up to the calendar month. The surrender will be allowed on payment of surrender fee equal to one-month dead rent/contract money. However, such surrender fee would be equal to two months dues in case applications are submitted during June 1 to September 15 (monsoon period). No application for surrender of part area of the mineral concession shall be maintainable. The director shall pass orders accepting the surrender request within 30 days. In case no decision is communicated, the application for surrender shall be deemed to have been accepted on expiry of 30 days of submission of the application. Also, the minimum distance from the source of mineral (mine) for grant of MDL be increased to 5 km for raw mineral from mines, to reduce the possibility of stocking illegally mined mineral. In cases of washing plant and screening plant, provision for grant of MDL based on NOC/CTE of the HSPCB,” the spokesperson said.

Goa Spent Bulk of Money for Mining-Affected People on COVID-19 Relief

Science The Wire | March 18, 2021

On April 28, 2018, Devidas Nayak of Molem, a mining-affected village in south Goa, wrote to the authorities managing the District Mineral Foundation (DMF) funds, explaining that his agricultural land has lost its water holding capacity because the drainage adjacent to the land is full of mining silt resulting in flash floods during the monsoon, making it easy for wild boar and bison to destroy the land.

He sought financial assistance to desilt the nalha, and help in infrastructure for irrigation of his fields. Nayak, who was formerly working with barge transportation (of minerals), had lost his job since the mining industry shut down and needed financial help in protecting his fields. Nearly three years later, on January 6, 2021, his letter was forwarded to Goa’s water resources department for scrutiny.

Nayak’s plea is among nearly 200 such letters since 2018 that are with bodies controlling Goa’s DMF funds. These letters are from individuals, panchayat members, doctors, legislators, and non-profits representing mining-affected villages, requesting financial assistance for basic needs such as drinking water, water for irrigation, restoration of agricultural land, desilting of agricultural land, education, providing transportation for children, and creating health infrastructure – fundamentals of a functioning village. Three years later, while some of these requests have been approved, most are pending or have been deferred indefinitely.

In June 2015, through an amendment in India’s central mining law – the Mines and Minerals (Development and Regulation) Act 2015 – DMFs were introduced in all districts in the country that are affected by mining-related operations, including Goa’s two districts, north and south. These district mineral foundations were tasked with managing and utilising the funds for the interest and benefit of people and areas affected by mining.

DMF funds diverted for COVID-19

According to documents accessed by Mongabay-India, about Rs 202.5 crore was collected under DMF, and of that approximately Rs 42 crore has been spent thus far. However, of this, merely Rs 4 crore has been utilised directly for the mining-affected villages, while the rest of the Rs 38 crore has been diverted towards COVID-19 relief. In March 2020, when the pandemic struck, the central government came out with an order that said that up to 30% of the DMF funds can be diverted towards coronavirus relief work.

But the central government’s move had come under severe criticism from several quarters including from the organisations working with mining-affected communities.

An analysis of the documents reviewed by Mongabay-India reveals that the DMF funds utilised for COVID-19 have gone into purchasing thermal imaging cameras, quattro machines, test kits, personal protective equipment, micro PCR systems – most of the equipment meant to be utilised in COVID-19 hospitals in major cities of Goa: Panjim, Vasco, Ponda and Margao.

Goa has two districts – north, which covers the mining belt, the coastal belt as well as the major cities of Panjim and Mapusa; and south, which also covers the mining belt, the coastal belt and the major cities of Margao, Vasco and Ponda.

The remaining Rs 4 crore went into providing water to mining-affected villages, providing transportation facilities for school children, pumping water out of the mining pits in a few villages, and desilting agricultural land for the village of Sirigao in north Goa. This utilisation, lawyers and activists say, has come only after being slapped by court orders.

“The DMF authorities have done no work for the benefit of the mining-affected villages of their own accord,” Anamika Gode, an environmental lawyer working for Goa Foundation, a non-profit based in Goa, told Mongabay-India. “If you notice, you will see that only water and transportation facilities have been provided thus far, and only one village has had its agricultural land desilted. Work under the DMF has started only after the repeated intervention of the High Court of Bombay at Goa.”

“It took them two years to even consider these applications. And if you notice in the minutes of the meetings, all COVID-related purchase approvals are post-facto,” she added.

In August 2020, two residents of mining-affected villages filed a petition against the Goa government, stating that the DMF funds have been misused by the state government, questioning the legal basis of the diversion of funds, and stated that the mining-affected areas have been completely neglected.

Hanumant Parab, a mining activist from Pissurlem, a mining-affected village in north Goa, said that the DMF had provided their village with 117 water tanks of 500 litres capacity each.

“We are yet to get the water though. They gave us the tankers two years ago but not a drop of water had come from them yet. They need to provide more tankers also,” Parab told Mongabay-India. The village currently depends on an erratic piped water supply from the government, and mining companies are mandated to provide water to some of the wards every day.

South Goa DMF had Rs 97.43 crore in its coffers, and, of that, it used Rs 14.95 crore. And of that, Rs 14.10 crore went towards COVID-19 relief work while the remaining Rs 85 lakh was utilised for providing drinking water to the mining-affected villages in south Goa, and transportation facilities to school-going children.

Indefinite delays and lack of access

Apart from the lack of priority and initiative towards the mining-affected villages, the DMF funds have also been criticised for tardy administration.

According to the minutes of the meeting that took place for North Goa DMF in June 2020, it was decided that all applications will be routed via the concerned departments: water queries to the water resource department, education-related queries to the education department.

However, no information was given about this change, so the individuals would continue to send their applications to the DMF authorities, who would then send them to the department concerned for scrutiny who would then respond if it was worthy of funding or not and a final decision would be taken by the governing council at meetings that are supposed to be held once every three months. Another problem that cropped up was the lack of ease of obtaining information from the website.

“There is no dedicated website for DMF,” said Gode. “Some sporadic information has been provided in PDF documents on the mines department website. How is anyone ever going to update themselves on the status of the application? How will they ever know what happened to their application?” she asked.

“Goa could have been a model state for DMF activity,” she said. “Mining came to a halt, the government had a real opportunity to rehabilitate the villages and we could have really shone because we know that it is possible to bring the fields and water sources alive again and resolve issues, but sadly, the reality is quite different.”

Whose minerals are they anyway?

Mongabay | Sep 10, 2020

Over the past few months, the government of India has been focusing on the mining sector to revive the country’s economy but it is feared that it could mean a troubled time ahead for communities involved and environment.
However, the major question is whether such a push is in line with the National Mineral Policy 2019 of India which talks about the concept of inter-generational equity as far as mineral wealth is concerned.
The organisations involved with the communities that are impacted by the mining believe that protection and welfare of tribal people and poor are rarely the focus area of mining plans which are heavily focused on higher revenues.
To tackle the already slowing economy, whose condition further deteriorated after COVID-19 pandemic, the Indian government is pushing for more mining. But is this push for more revenue in line with the principles in India’s mining policy that talk about sustainable mining and minerals being a part of shared inheritance with future generations?

Over the past few months, Prime Minister Narendra Modi and various other ministers in his government have emphasised that the push for mining including coal will result in additional investments and revenue worth hundreds of billions of rupees. The government has already unveiled more reforms in the mining sector.

Meanwhile, communities that are already struggling with land conflicts, pollution issues (water, air and soil), health impacts, continue suffering even as new areas that will be opened for mining come with a potential threat to the local ecology, including biodiversity, forests and the communities.

Odisha-based tribal rights leader Deme Oram said that communities whose areas have been destroyed due to the greed of mining companies and the state authorities are helpless. “There are many Supreme Court orders which state that mining in scheduled areas (as per the Indian constitution), should be done through cooperatives that have tribal communities as members. But it is rarely done and such orders are openly violated by states to favour corporates and money bags,” Oram told Mongabay-India. He is the member of Mines, Mineral and People (MMP), an alliance spread across 18 states with more than 100 grassroots groups and about 20 diverse support organisations.

The concept of minerals being part of the shared inheritance is mentioned in the Indian government’s National Mineral Policy 2019. It noted that “natural resources, including minerals, are a shared inheritance where the State is a trustee on behalf of the people and therefore it is imperative that allocation of mineral resources is done in a fair and transparent manner to ensure equitable distribution of mineral wealth to sub-serve the common good.”

The policy had stressed that mining needs to be carried out in an environmentally sustainable manner keeping stakeholders’ participation, and devolution of benefits to the mining-affected persons with the overall objective of maintaining a high level of trust between all stakeholders.

But the on ground situation shows that rarely happens as conflicts related to land, health and ecology in the mining sector are found in abundance. Once the mining starts, the life of the communities in and around mining areas takes a turn for the worse and even when the mining is over its after-effects have shown to continue to impact people. Increasingly, the concept of just transition is being discussed which deals with the discussion around sustainable mining and the impact of operational mines on people and ecology.

“Even if tribal communities form a cooperative, or they get together and start mining there is no one who will buy products from them and let them flourish. Moreover, when mining is done by corporates the poor people are exploited and the local ecology (air, water and soil) is completely destroyed. People are left to suffer and they have nowhere to go. The state authorities whose prime responsibility is to protect the rights of people are working for corporates. Even the District Mineral Foundation funds, whose control should have been with communities, is being used by authorities for work like roads etc which should have been done for those people irrespective of the DMF,” said Oram, who focuses on land rights of the tribal people and governance in Fifth Schedule areas. Fifth Schedule areas are tribal-dominated areas identified under the Indian Constitution where special care is taken for rights and welfare of tribal communities.

For instance, he said, around 20 years ago, when sponge iron plants started in Odisha, people were told that it would bring development. “The only thing those plants have done is to destroy the lives of people and air, water and soil. In such a scenario, communities have no place to think about who owns the mineral wealth and how that should be preserved for future generations. They are busy saving their present and trying to earn their livelihood,” said Oram.

Is sustainable mining the keyword?
India’s National Mineral Policy 2019 had also emphasised that mining operations shall not ordinarily be taken up in identified ecologically fragile and biologically rich areas. It had noted that the government shall identify such areas that are critically fragile in terms of ecology and declare as ‘in-violate areas’ or ‘no-go areas’ out of bounds for mining and with a view to reducing pollution, carbon footprint and operational costs, use of renewable sources of energy at mining sites will be encouraged through appropriate incentives.

It had even suggested an inter-ministerial mechanism to decide the limits on the extent of mining activities that should be permitted including a detailed study for assessing the ceiling of annual excavation of minerals, considering the availability of mineral resources, the carrying capacity of the region, and the macro-environmental impact on the region while also “keeping in mind the principles of sustainable development and intergenerational equity and all other relevant factors.”

Rahul Basu, who is the research director at Goa Foundation, a Goa-based environmental group, said that it is important for governments to recognise that since natural resources, including minerals, are common wealth held in trust, not proprietary assets of the government in power, all the duties of a trustee apply to the government, including the duty to protect the corpus of the trust, prevent theft, loss or waste, and a duty to treat beneficiaries equally.

On the government’s efforts to boost the mining sector, Basu said it is “absurd to think increasing mining will lead to an economic revival.”

“Average daily employment in non-fuel major mineral mines is only around 100,000, around 0.25 percent of India’s workforce. And mining is steadily getting more mechanised. Further, if we see minerals as inherited wealth, surely it is better to purchase the minerals we need from others and keep our own minerals safely for our future generation,” Basu told Mongabay-India.

He explained that for most minerals, the existing mines in the country have sufficient reserves to supply industry and thus it would be preferable from community rights and environmental standpoint to expand existing mines rather than open new mines.

“However, the government seems focused on giving away large tracts for new extraction projects at exactly the worst time to be selling wealth. Even with the existing mines, there are many violations of community rights and environmental laws. For example, all mines in Goa were found to be violating one or more law. Why is it that the Indian mining industry is simply unwilling to follow the law? It would be better for the government to first do an intensive study of all existing mines to see if they are following the law, especially in connection with community rights and the environment,” argued Basu.

He further remarked that in cases where any violations are found, the local communities should be properly compensated, the environmental damage restored, the offending lessees blacklisted, and the leases auctioned off.

But what irks the communities is that the promised development due to mining rarely reaches them.

Sanjay Namdeo, who is the head of the Communist Party of India (CPI) in the Singrauli district, stressed mineral-rich Singrauli area, which is dominated by tribal people, was a land of abundant water, forests and agriculture but has now been ravaged due to human greed.

“The experience of extensive mining in this region over the past few decades has shown everything that is bad with the mining industry. Ideally, the communities should have full right over the water, forests and land as they nurture it over the years. But governments fail to do so. For example, in Singrauli, the government failed to ensure that people get the benefit. Instead, it is the industrialists who get all the benefits. Secondly, mining should have improved the lives of people involved or impacted by the mining sector including those whose livelihoods were based on the land where mining is taking place. But this never happened and instead, their lives have been completely destroyed. The mining profits should have been shared with the communities but that never happens,” Namdeo told Mongabay-India.

Minerals are a shared inheritance
Mining is an important sector in India’s economy and results in raw material for many other industries in the country. Right now, India now produces 95 minerals and is among the top producers of coal and iron ore globally. There are thousands of mining leases across the country. Over the past few months, the central government has been focusing on pushing the mining sector to boost the economy. For instance, it first allowed commercial coal mining to increase coal production and then, in August 2020, proposed reforms in the mining sector.

But the question is whether such reforms will be able to improve the lives of the communities involved.

Saswati Swetlena of the Mineral Inheritors Rights Association (MIRA), a network of civil society groups, said mineral resources are a shared inheritance and are best safeguarded by the local communities for the future generations.

“The local communities particularly, women, must be recognised as the custodians of all forms of natural resources and its governance as their fundamental right to ensure environmental justice. In the name of ease of business and public purpose, the state has been violating every legal provision meant to protect the rights of the communities. How does any mineral extraction make sense when it evicts and dispossesses millions from their life and livelihoods for the benefit of a few corporates? Is the state trust-worthy?” Swetlena questioned.

Rahul Basu of Goa Foundation said we need to ensure our children and future generations inherit at least as much as we did and we must ensure we capture the full value of our mineral wealth, save the entire proceeds for future generations, and distribute the income from the new investments equally to all as a citizens dividend, a right of ownership.

“At present, governments wrongly treat royalties as revenue, not a capital receipt, and merrily spend it, cheating our children and future generations of their rightful inheritance. There are a number of other inheritances that are depleted by mining, including the environment, the social fabric of the local community, the employment and incomes associated and the right to use the ore for useful things. Each of these inheritances is also subject to the inter-generational equity principle, and mining must be planned in such a way to ensure we avoid, restore or offset any damage to these inheritances, and if that is not possible, capture the full value and save it for future generations. This is only ethical, moral, fair, just and right,” Basu remarked.

District Mineral Foundation funds crucial resource for ensuring income security in mining areas post COVID-19

Brookings | Srestha Banerjee | May 06, 2020

The Prime Minister of India held a meeting on April 30, 2020 to consider reforms in the mines and coal sector to jump-start the Indian economy in the backdrop of COVID-19. The mining sector, which is a primary supplier of raw materials to the manufacturing and infrastructure sectors, is being considered to play a crucial role for the resurgence of the economy post the lockdown and in the coming years.

While several reforms are being mulled over to boost mining businesses, the Centre and the state Governments also need to consider boosting local livelihoods. In the context of mining districts, the District Mineral Foundation (DMF) funds can be used for prioritising livelihood generation and creating local jobs. The Prime Minister in the latest meeting has also discussed the scope of improving “community development activities” through the fund.[1]

DMF was instituted in March 2015, under the Mines and Minerals (Development and Regulation) Amendment Act 2015. It has been conceptualised as a benefit-sharing mechanism with mining-affected communities, recognising them as partners in natural resource-led development. Set up as a non-profit trust in all mining districts of India, DMF comes with the precise objective to ‘work for the interest and benefit of people and areas affected by mining’, through a participatory process. In September 2015, the Centre further aligned DMF with the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) scheme, to implement various developmental projects and welfare programmes in mining-affected areas using DMF funds.[2]

Livelihood and income generation is a key issue that DMFs need to focus on for mining-affected communities across the country. This has been emphasised through the MMDR Amendment Act 2015 and the respective State DMF Rules developed under it, as well as the PMKKKY scheme. The emphasis comes in three ways.

Firstly, considering the fact that mining-related activities lead to significant displacement and loss of livelihoods in these areas, the law specifically notes that people who have lost their land rights (including user and traditional rights) due to mining or whose livelihood has been affected by such activities, constitute DMF beneficiaries. Secondly, one of the defined objectives of PMKKY is to ensure long-term sustainable livelihood for the people affected by mining. Finally, following the PMKKKY guidelines, livelihood and skill development have been recognised as ‘high-priority’ issues under all state DMF Rules on which districts must invest adequately.

Besides regulatory prerogative, the economic situation in the mining districts also clearly point out why income generation and creation of diverse livelihood opportunities should be a focus of DMFs. For example, in most of the mining districts, particularly in the rural areas where most mines are located, the income level among the local population is extremely low. As per socio-economic caste census of the Government of India, in a majority of these districts, 80 to 90% of the rural households have the highest earning member getting below Rs. 5,000 per month (Table 1: Distribution of household earnings in rural areas of some top mining districts). What adds to the low-income levels is the income uncertainty, as more than 50% of the workforce comprise of manual and casual labourers in these districts. Poverty and uncertainty of income also undermines the access to adequate food, proper healthcare, education and all such basic needs.

Table 1: Distribution of household earnings in rural areas of some top mining districts

StateDistrictHouseholds having monthly income of highest earning household member less than Rs. 5,000 (%)Households having monthly income of highest earning household member between Rs. 5,000 to10,000 (%)Households having monthly income of highest earning household member more than Rs. 10,000 (%)
OdishaKeonjhar90.65.24.2
Sundargarh89.85.44.8
JharkhandWest Singhbhum53.837.38.9
Chatra83.211.85.0
ChhattisgarhDantewada94.73.12.2
Korba91.34.44.3
RajasthanBhilwara82.511.85.5
Chittorgarh84.010.55.5
Madhya PradeshSingrauli86.59.93.6
Satna82.311.76.0
TelanganaKarimnagar78.817.04.2
Khammam74.621.44.0
KarnatakaBellary72.020.37.7
Gulbarga47.530.921.6
MaharashtraYavatmal74.915.99.2
Chandrapur79.710.69.7

Source: Socio economic caste census, 2011, Government of India

Neglected so far, livelihood investments must now be a priority for DMFs

Despite the mandate to improve livelihood and income among communities in the mining-affected areas, DMFs in almost all mining states have failed to make the required investments on this extremely important sector so far. For instance, in most of the top mining states, the funds earmarked for livelihood and skill development are negligible compared to the total cumulative accrual of DMF funds (Table 2: Allocation of DMF funds for skill development and livelihood in top mining states). The allocation towards this account for only 0-4% of total allocations for various developmental works in these states. [3]

Table 2: Allocation of DMF funds for skill development and livelihood in top mining states

StateTotal DMF accrual(Rs. Crore)Allocation for livelihood and skill development(Rs. Crore)
Odisha9,772196.0
Jharkhand5,3050
Chhattisgarh5,115456.3
Rajasthan3,6280
Madhya Pradesh2,938No information available
Telangana2,79080.0
Karnataka1,88562.0
Maharashtra1,79148.0

Source: Ministry of Mines, Government of India, DMF fund status up to February 2020 and State Government mining departments. [4]

The course must now be corrected. As policymakers at the Centre and state levels discuss relief measures for the poorest and reviving their income, they have an opportunity to strengthen implementation of key programs like PMKKKY and DMF to improve the ground situation. For this, the Centre and respective state governments need to provide clear directions to all districts.

With more than Rs. 36,858 crores in DMFs across the country, the potential of this fund is enormous for improving socio-economic conditions of local communities in the mining districts. As we start a new financial year, it is also the time for DMFs to start planning and budgeting for the 2020-2021. The law requires DMFs to undertake such annual planning considering the situation on the ground and capturing the need and aspirations of local communities.

For DMFs in all districts, much attention must be paid to skill development and providing other resource support for sustainable income generation. This, as noted earlier, is also enshrined in the third objective of PMKKKY and a priority component of all State DMF Rules.[5] Considering the potential of local skills and resources, employment opportunities can be improved through multiple means. For example, incentivising livelihood opportunities around local resources such as forest products can be helpful as many of the mining areas are rich in forests. In fact, the Government of India last week announced raising of minimum support price (MSP) for 49 varieties of minor forest produces, including wild honey, tamarind, mahua flowers and seeds, lac, sal leaves etc., in view of circumstances arising out of Covid-19.[6] DMF funds can further be used to support market linkages for these produces and their products to ensure better economic value for the goods. Besides, agro and horticulture-based industries should be developed which will be relevant to the knowledge and skills of the local people. Providing support to women self-help groups (SHGs) on micro enterprises such as poultry farming, dairy, sericulture, handicrafts, handlooms, etc. will also be important to improve women participation in the workforce. At the same time creating a workforce for various occupations including health care givers through proper training will be crucial for supporting income as well as bridging resource gaps in primary healthcare.

DMFs in various states and districts cannot afford to put the issue of livelihood in the backseat anymore. Given the urgency of the economic situation the states and districts must shore-up investments towards this.

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