The government is considering to set up a trust to monitor its scheme, which aims to compensate people displaced due to mining operations from the profits of such projects.
"The Group of Ministers (GoM), which is reviewing the Mining Bill will consider the proposal to create - District Mineral Foundation - to monitor the flow of funds, from companies to the trust and from the trust towards the development of local area and compensating the displaced," a senior government official said.
The trust, to be headed by a District Collector, will be responsible for compensating people affected by mining operations. The official said, the trust would also act as a proper check on the mining entities to compensate the displaced.
Also, the trust could be a source of regular income to the displaced, may be in the form of quarterly or annual payout, and some part of the fund could be channelised for area development.
"For example, the proposed 26 per cent profit sharing from mining projects will come to the trust and then it would be disbursed from there. The trust will be the authority over the fund flow. It aims to remove any disparity arising out of compensation as well."
"It would be responsible for maintaining proper books for the same, preparing annual plans, budget for utilisation of the fund," the official said.
The GoM, headed by Finance Minister Pranab Mukherjee, had earlier asked the Mines Ministry to fine tune its proposal to compensate the displaced persons.
The Mines Ministry diluted the plan of mandating firms to share equity with the affected persons, rather have proposed 26 per cent profit sharing from mining projects.
"New sections 54A and 54B have been added for creating the trust," the official added. There's a section 54 created for setting up a mining regulator.
The GoM, which was slated to meet today, is expected to meet later this week for approving the Bill. The Bill would be sent to the cabinet for its approval, as the government plans to place the draft legislation in the current session of Parliament.
