Miners cry foul as 70% of District Mineral Fund remain idle

Business Line | Nov 03, 2019

While the Central government is struggling to make its ends meet with falling revenues and rising expenses, the mineral rich states are fighting a problem of plenty.

The 21 mineral rich states in country has managed to spend only 30 per cent of the money collected under District Mineral Fund (DMF) ever since the states started collecting a portion of the value of mineral mined as royalty in last five years. As of August, these states together had accumulated Rs 31,831 crore in DMF but spent only Rs 9,555 crore in districts around the mining area, as per government data.

Mining lease

As per the Mines and Minerals Development & Regulation Act, 2015, companies that have acquired mining lease through the auction route have to pay 10 per cent of the value of mineral as royalty to the state government which in turn will set up a DMF. Older mines that are allocated by the government outside the purview of auction chip in 30 per cent to DMF. The leases of these mines will expire and auctioned next March.

The mineral producing states have collected Rs 13,584 crore as DMF from sale of coal and lignite while contribution from other major minerals and minor minerals were Rs 15,241 crore and Rs 3,006 crore, respectively. Of the 583 districts that were suppose to set up DMF, only 557 have formed the fund.

Of the 133,214 projects identified, 23,804 projects are yet to start while 6,538 projects have been cancelled. In all 45,523 have been completed and 57,349 projects are ongoing. With Rs 8,253 crore, Odisha has the highest DMF corpus. Out of 12,664 projects sanctioned, only 5,438 projects have been competed, 4,130 are on-going, and 3,096 are yet to start. However, Odisha has not scrapped a single project.

DMF corpus

Similarly, Jharkhand, the second highest contributor in DMF, with about Rs 4,585 crore, has 16,519 projects sanctioned but not a single project has been completed. With a contribution of Rs 4,435 crore, Chhattisgarh was the third largest state in DMF mop up. It has the highest number of sanctioned projects at 31,657 and has completed 20,025 projects and scrapped 1,448 projects.

Others such as Rajasthan, Telangana and Madhya Pradesh also rank among states with top DMF corpus. RK Sharma, Secretary General, Federation of Indian Mineral Industry said while the numbers speak for the themselves, the progress of projects has been pathetically slow and communities believe that mining companies are not doing enough.

Government should form a body of Indian mining companies and state governments to make a concrete action plan and spend DMF funds gainfully, said Sharma who heads the apex body of miners.