Business Line | Dec 21, 2018
Slow pace of utilisation raises fears of diversion
The Pradhan Mantri Khanij Kshetra Kalyan Yojna (PMKKY) has accrued ₹22,859 crore till November, but what has been utilised is around ₹5,529 crore. The slow pace of District Mineral Fund (DMF) utilisation has fed fears of these funds being diverted by State governments for being spent in other regions or for other purposes too.
The condition worsens in States like Jharkhand where ₹471.98 crore were collected from Chatra district till October but have translated into sanctioned expenditure of just ₹93.46 crore and an incurred expenditure of ₹28.73 crore.
The highest DMF contributions have been reported from Odisha at ₹5,599.5 crore. Chhattisgarh comes second at ₹3,223.80 crore and Jharkhand comes third at ₹3,319.01 crore. The PMKKY was launched in September 2015 to provide for the welfare of areas and people affected by mining related operations, using the funds generated by DMFs. The DMFs were to be funded by earmarking 10 per cent or 30 per cent of the royalty proceeds from the minerals that were produced in these districts.
Of all the funds accrued, 60 per cent have to be spent for drinking water supply, health care, sanitation, education, skill development, women and child care, welfare of aged and disabled people, skill development and environment conservation.
The balance funds are to be spent on making roads, bridges, railways, waterways projects, irrigation and alternative energy sources.
According to officials in the Ministry of Mines, the pace of DMF utilisation is expected to improve as mineral rich state governments are now assured of collectively getting around ₹700 crore every month through the DMF.
“The sustained income for States can help better planning of fund expenditure by the state governments,” a Mines Ministry official told BusinessLine.
“The DMF is meant to foot the bill for development activities in mining affected districts. That diversion of funds will not be allowed without the approval of the centre and such a situation will arise only when all development activities of a district have been completed,” he added.