Should district mineral foundations be with state mining departments?

DownToEarth ||Srestha Banerjee || Thursday 10 January 2019

Recent plan to move Odisha DMF from the state planning and convergence department to the mines department raises several questions

The Odisha government is planning to move its district mineral foundations (DMF) to its steel and mines department from the planning and convergence department. A proposal is pending with Chief Minister Naveen Patnaik’s office, a source said.

The eastern state is the only one in India the planning department is the nodal authority for DMFs. Elsewhere, they are under respective mines departments, as money for them is generated from mining companies operating in affected districts. The amount is determined on the basis of the royalty that companies pay to mines departments.

“The plan to move the DMFs aims to improve implementation and use of funds,” an official said. Odisha has more than Rs 5,800 crore in DMFs, the most in India (total Rs 23,000 crore), thanks to key mining districts such as Keonjhar, Sundargarh and Angul.

Is the mines department a suitable custodians

DMFs were instituted under the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act 2015 as non-profit trusts to work for the interest and benefit of persons and areas affected by mining-related operations.

The various state DMF rules and the Pradhan Mantri Khanij Khestra Kalyan Yojana (PMKKKY) guidelines stipulate some “high priority” issues for DMFs, including

  • drinking water
  • health
  • women and child welfare
  • education
  • livelihood and skill development
  • welfare of aged and disabled
  • sanitation

Therefore, its objectives and aims make it clear that DMFs are meant to alleviate poverty and improve human development indicators. Hence they are more aligned to state and district planning departments along with other concerned departments that overlook the high priority issues.

The mining department is only concerned with the source of funds. The primary role of the mining department is in fact mineral development and not human development.

“Placing DMFs under the state planning and convergence department is in fact a very reasonable step that Odisha had taken. Since proper planning is crucial for effective functioning of DMFs and ensuring that the money is spent well, it makes sense to place it under this department,” says Chandra Bhushan, deputy director of New Delhi-based Centre for Science and Environment (CSE).

“Also convergence with certain poverty alleviation and human development schemes is important for DMFs,” adds Bhushan.

With significant financial corpus, DMFs can help improve the reach and delivery of these schemes. These include critical issues such as child nutrition, healthcare, education, livelihood, welfare of old and disabled etc.

In fact the importance of proper planning and convergence with other departments has also been recognised by the Union ministry of mines. The ministry is holding a national workshop on DMF and PMKKKY implementation in January 2019, where joint secretaries of various ministries, such as health and family welfare, women and child development, water resources, rural development, tribal affairs, human resource development etc, have been invited to present on scope of convergence.

A recent report of the Parliamentary standing committee on coal and steel has also emphasised that DMF planning underscored its importance in poverty alleviation and human development of the mining-affected people.

Therefore, restricting DMF to the state mining departments will only limit its scope and effective operation as well as optimal utilisation of funds.