Odisha falters on DMF fund spends despite topping others in collection

State has spent less than a quarter of Rs 7,909 crore it collected by June end; 3,617 of 12,605 projects under DMF yet to take off

Odisha seems to have dragged its feet on expending funds accruing to the District Mineral Foundation (DMF). The state tops others in collection but trails the pan-India average in execution of projects and utilizing funds.

Though Rs 7,909.25 crore has been allocated in Odisha, only Rs 1,672.34 crore has been spent (as on June 30, 2019), meaning a utlisation rate of only 21 per cent. The state has commissioned 12,605 projects under DMF, 3,617 of which are yet to take off. As many as 5021 projects have been completed and 3967 others are ongoing. 

Data available on the Union mines ministry's website shows the nationwide pace of utilisation of DMF proceeds is 32 per cent. The sum allocated to 21 mineral rich states (as on June 2019) stands at Rs 25637.66 crore out of which Rs 8269.43 crore has been spent.

Among states, Chhattisgarh boasts of the best record in DMF funds utilisation- it has spent 65.3 per cent of the allocated amount of Rs 4364.86 crore. Most of the other states are also sluggish in using DMF funds.

DMFs have been created in each mineral producing district under the provisions of the amended Mines and Minerals- Development & Regulation (MMDR) Act, 2015. They are funded by contributions from the miners. Older mines have to fork out 30 per cent of the royalty while newer mines obtained through the auctions route after January 12 2015, the date of enactment of MMDR Act pay 10 per cent of the royalty.

Given the patchy record in the use of DMF funds, a Parliamentary panel had last year urged the Centre to formulate a monitoring mechanism for surveillance. More often, the projects identified under DMF did not benefit the people displaced or affected by mining activities. Misplaced or skewed priorities in project identification and fund utilisation left the potential beneficiaries in the lurch.

In its report released a year ago on the skewed priorities in spending of DMF money, Delhi-based non-profit organisation Centre for Science & Environment (CSE) noted that the DMF is deviating from its people-centric objective and is failing to serve the intended beneficiaries. “Both in terms of administration and fund use, it is increasingly becoming indistinguishable from any other general development fund. The most problematic aspect is that some of these are also going against the spirit of the legal provisions guiding DMF”, the report went on.

The digressions were striking in Odisha as per the CSE report. Most of the DMF investments have been parked in areas which do not benefit the people affected by mining. The CSE study establishes that less than two per cent of Odisha's DMF sanctions has gone into women and child development, a critical area impacting most mining districts. Physical infrastructure is the top focus area, it has absorbed 34 per cent of the sanctioned DMF funds. Drinking water supply (25.2 per cent), healthcare (17.7 per cent) and education (10.5 per cent) form the other important sectors.