On July 12, the Ministry of Mines came out with an order that sought to reiterate the District Mineral Foundation’s core spirit and, more importantly, the utilisation of its resources by the states. For a funds pool that stands at a staggering Rs 49,000 crore and was created to better the lives of India’s poorest communities dependent on natural resources in the mineral-rich districts, the ministry’s notification has gone largely unnoticed. But it can have critical ramifications because by virtue of the order, the Centre almost restricts states from making sanctions or approving expenditure out of DMF.
The Centre also observed that states have been found transferring DMF funds to their own treasury and consolidated funds, and even to the Chief Minister’s Relief Fund and other schemes. This, according to the mines ministry, is in violation of Section 9B of Mines and Minerals (Development and Regulation) Act that guides the DMF. Ever since its establishment in 2015, the DMF has been portrayed as the saviour of communities—tribals mostly—that have benefitted little from mineral exploration and development in the regions they inhabit. Six years down the line, there are instances galore where DMF funds have gone to areas that have little or no bearing on the lives of the vulnerable population. Yes, there are good practices that have energised health, education and other priority sectors but equally discernible are projects that mean little to them.
The latest order by the Centre also echoes the same because putting huge financial resources to uses other than what they are mandated for defeats the whole purpose of the DMF’s creation. The notification could also stir up a debate over the Centre interfering in the financial powers of the states. It is therefore important that both the Centre and states take up a joint exercise to ensure the DMF meets its objective. Mineral development comes at a huge social and environmental cost, but communities living in these ore-bearing landscapes must be the principal beneficiary of the funds because they are the ones who bear the brunt.