DNA SERIES: Despite ample contribution, Rajasthan fails to spend District Mineral Foundation fund

Even after collecting a huge amount around Rs 2,000 crore from minerals mining districts in Rajasthan under the most ambitious District Mineral Foundation (DMF) trust till May this year, the state has performed poorly when it comes to allocation and use of the allocated fund from the DMF, reveals a latest study by New Delhi based Centre for Science and Environment (CSE). 

As per the study, Rajasthan is among top five states in terms of collection of DMF, with a total cumulative accrual of Rs 1,782 crore till April 2018. The topmost districts in the state in terms of DMF collection are Bhilwara - Rs 290 crore, Rajsamand - Rs 250 crore, Chittorgarh - Rs 140 crore and Udaipur Rs 95 crore.

Study reveals that Rs 1,062.6 crore were sanctioned for different projects under DMF. However, till April 2018, a total expenditure of Rs 129.5 crore was made which stands a mere 12 per cent of the total allocation. 

“DMF is a people-centric vision of natural resource governance where their right to benefit has been put at the forefront. If developed and implemented well, DMFs not only have huge potential for improving the lives and livelihoods of some of the poorest communities, they can also be a model for inclusive governance,” said Sunita Narain, director general, CSE. 

The study named People First: DMF Status Report, 2018, is an assessment of DMF instituted in 2015. The report covers 12 states in the country and closely studies the investments in 13 districts in the top five states, including Odisha, Jharkhand, Chhattisgarh, Madhya Pradesh and Rajasthan. These 5 states have collected over 72 per cent of the total DMF fund in the country. Under the study, five districts of Rajasthan are surveyed and in-depth analysis has been done for Bhilwara district.

What is DMF? 

The DMF was created in 2015 by the Central government through an amendment in the Mines and Minerals (Development and Regulation) Act, 1957. A District Mineral Foundation Trust was to be setup in all mining districts as a mechanism to share mining revenue for the benefit of persons and areas affected by mining-related operations in these districts.

How DMF is created 

The mining companies are required to pay a sum, determined on the basis of their royalty payments, to the DMF trust of the district. For major minerals (such as coal and iron ore), the contribution is 10 per cent of the royalty paid to the state government for mining leases granted on or after January 12, 2015, and 30 per cent of the royalty for leases before that. For minor minerals (such as sand and stones), the payments are decided by the states.