CAG finds Chhattisgarh mining department underutilised District Mineral Fund Trusts, delayed projects

CAG finds Chhattisgarh mining department underutilised District Mineral Fund Trusts, delayed projects

Subject: Economy

Section: External Sector

Context:

• The CAG report found several irregularities in the working of the trust, including the delays in projects and underutilisation of funds.

District Mineral Foundation Trust (DMFT):

• The mining department’s District Mineral Foundation Trust (DMFT) was setup by the Chhattisgarh government in 2015 as a nonprofit in all districts of Chhattisgarh to work for the interest and benefit of people and areas affected by mining operations.
• It is funded through the contribution from miners. They derive their legal status from section 9B of mines and minerals (Development and Regulation) Act, 2015. This amendment came into force from 12 January 2015.
• Under Rule 6 of DMFT regulations, the department is required to prepare and maintain an updated list of directly and indirectly affected areas by mining operations. They are also required to keep an updated list of mining-affected people and local communities.
• Directly affected areas are locations where mining, blasting, excavation and waste disposal take place during mining operations.
• Indirectly affected areas by mining-related activities are where the local population suffers from economic, social and environmental repercussions.

Composition and Functions of DMFT:

• Composition and Functions of the DMF is prescribed by the State Governments taking guidelines from article 244 of Indian Constitution, fifth and sixth schedules, Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.
• Funds every mining lease holder of will pay a fraction of royalty, not exceeding one-third of the royalty, to the DMF as per rates prescribed by Central Government.
• This fund will be used for welfare of the people affected in the mining affected areas.

Pradhan Mantri KhanijKshetra Kalyan Yojana (PMKKKY):

• The Ministry of Mines launched PMKKKY in 2015 for the welfare of areas and people affected by mining-related operations, using the funds generated by District Mineral Foundations (DMFs).
• Objectives:
  • to implement various developmental and welfare projects in mining affected areas, complementing the existing ongoing schemes of State and Central Government;
  • to minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts; and
  • to ensure long-term sustainable livelihoods for the affected people in mining areas.
• Implementation:
  • It will be implemented by DMFs of the respective districts using the funds accruing to the DMF. The Mines and Minerals (Development & Regulation) Amendment Act, 2015, mandated the setting up of DMFs in all districts in the country affected by mining related operations.
  • The Central Government has notified the rates of contribution payable by miners to the DMFs.
  • In case of all mining leases executed before 12th January, 2015 miners will have to contribute an amount equal to 30% of the royalty payable by them to the DMFs. If mining leases are granted after 12.01.2015, the rate of contribution would be 10% of the royalty payable.
• Utilisation of Funds:
  • At least 60% of PMKKKY funds to be utilized for High priority areas.
    • The high-priority areas include drinking water supply, healthcare, education, sanitation, skill development, environment preservation, pollution control measures, the welfare of women and children and the welfare of elderly and disabled people.
  • Up to 40% of the PMKKKY to be utilized for other priority areas such as- Physical infrastructure, Irrigation, Energy and Watershed Development etc.