Gaps Remain, Despite Odisha‘s Pole Position with Regards to Funds Received under District Mineral Foundation (DMF): says first independent assessment of the scheme done by CSE | Centre for Science and Environment


Gaps Remain, Despite Odisha‘s Pole Position with Regards to Funds Received under District Mineral Foundation (DMF): says first independent assessment of the scheme done by CSE

Report finds that there are shortfalls on various fronts, from institutional and administrative issues, to planning and budgetary allocations

  • Odisha remains the top state in terms of DMF accruals so far, with about Rs. 1933 crore collected until the end of 2016-17. The five biggest districts in terms of accrual are Kendujhar (Rs. 663 crore), Angul (Rs. 517 crore), Sundargarh (Rs.337.4 crore), Jharsuguda (Rs. 270 crore) and Jajpur (Rs. 171.4 crore)

  • Big allocations for physical infrastructure in the districts – 30.5% in Kendujhar and 39% in Sundargarh

  • Odisha districts are yet to register DMF Trusts which is critical for transparency and accountability of these institutions

  • The allocations at various instances are ad hoc and the plans  mechanically list the number and types of works to be undertaken, without any elaboration on the rationale of planning

  • The administration is dominated by government officials with poor representation of people. DMFs have been functioning without a fixed administrative set-up, such as an office for planning and co-ordination, relying on intermittent zeetings of the DMF body

  • Of the total of Rs 5,800 crore collected across India so far, Odisha, Jharkhand and Chhattisgarh alone account for close to 70 per cent of total money deposited in DMFs 

  • All districts have missed out on pressing issues such as issues of nutrition, welfare of the vulnerable such as children, women, orphans, aged and disabled people – a common concern in all mining areas

  • CSE view: to enable DMF to deliver its intended mandate, there are three important aspects that need to be addressed– institutional and administrative gaps, planning and budget allocations and a scientific approach to the planning process

New Delhi, June 13, 2017: “DMF is a defining opportunity to overturn the decades of injustice meted out to the thousands of people living in deep poverty and deprivation in India’s mining districts,” said CSE deputy director general Chandra Bhushan, releasing the Centre’s latest study on the status of District Mineral Foundation. The study was released in New Delhi on 8th June. 

Established as a non-profit Trust, DMFs in every mining district have the precise objective to work for the interest and benefit of persons and areas affected by mining related operations. The CSE report is an independent review of the progress and performance of DMFs in various mining districts of India. The report finds that there are shortfalls on several fronts including institutional and administrative issues, to planning and budgetary allocations.

The realities of Odisha allocation

Odisha remains the top state in terms of DMF accruals so far, with about Rs. 1933 crore collected until the end of 2016-17. The five biggest districts in terms of accrual are Kendujhar (Rs. 663 crore), Angul (Rs. 517 crore), Sundargarh (Rs.337.4 crore), Jharsuguda (Rs. 270 crore) and Jajpur (Rs. 171.4 crore)

The three districts of Kendujhar, Sundargarh and Jharsuguda have touched upon most of the ‘high priority areas’ of drinking water supply, education and healthcare, which are indicated in the state DMF Rules and the Centre’s scheme for mining-affected areas, the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY). However allocations and approaches to address these ‘high priority’ issues are varied.

For instance, all three districts have allocated funds for providing access to clean drinking water. At present only 3 to 4 per cent of rural households in these districts have access to clean drinking water. In Kendujhar this constitutes 33.3% of the DMF budget, while in Jharsuguda has allocated 36%. However, both districts have allotted the lion’s share of this budget without any proper rationale. 85% of Kendujhar’s drinking water budget is for tube-wells, said Srestha Banerjee, Programme Manager, CSE, “This is definitely not a wise investment given the high levels of ground water contamination in mining areas, a fact well recognized by authorities like Central Ground Water Board (CGWB).”

Jharsuguda, on the other hand has directed 91% of its drinking water budget towards municipalities. This allocation doesn’t take into account the fact that Lakhanpur, the biggest mining affected block of the district, is a rural block. Sundargarh, meanwhile, has allocated only 7.7% of the DMF budget for drinking water but has taken a more sensible approach to invest a major share – 88% of the sectoral budget – for ensuring piped water supply.

“The most major shortcoming in the allocations across sectors in the first year of the DMF budget is that the significant amounts have been allocated to various construction purposes. This defeats the core purpose of DMF by ignoring the creation of social capital,” said Bhushan. This trend is clear in allocations for education and healthcare, where 90-100% sectoral budget in these districts are for construction of physical infrastructure. For example, Kendujhar’s total allocation for education is 7.6% of the DMF budget, and the entire amount is intended for construction of additional classrooms. 

What can be broadly inferred from the first year of DMF budget of these districts is that the allocations have not taken into account the existing ground realities. “It makes little sense for districts like Jharsuguda and Kendujhar to invest more that 90% of their health budgets in a cancer hospital or a medical college respectively, while ignoring the abysmal situation with primary healthcare in mining affected areas of these districts, which is basically the first point of contact for the people whom DMF is meant for,” added Banerjee.

A major gap in Odisha also lies in the institutional mechanisms being set up under DMF. None of the DMF trusts in the state have been registered yet. Also the allocations in various sectors show no contemplative approach to planning. To deal with this, the Odisha government has directed districts with annual receipts of more than Rs 100 crore to set up Project Management Units (PMUs) to assist in planning, monitoring and evaluation of DMFs. These districts include Kendujhar, Sundargarh, Angul, Jajpur and Jharsuguda. Kendujhar and Sundargarh have already identified private consultants to award the work. “The question however, is how effective these PMUs will be in delivering social justice to mining affected people, which is the central edict of DMF,” said Bhushan. “This approach also ignores the basic mandate of making people part of planning process,” added Bhushan.

About DMF

DMF was instituted in March 2015 under India’s central mining law, the Mines and Minerals (Development and Regulation) Act (1957). DMF has also been aligned to an important scheme of the Government of India, the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) that was launched in September 2015. According to the provisions of DMF, miners and mining companies are required to pay a sum to the DMF Trust of the district where the mine is located. This sum is determined on the basis of their royalty payments.

The fund is clearly a bounty for some of India’s poorest and under developed districts, many of which are in the country’s top mining states. In India’s top three mining states – Odisha, Jharkhand and Chhattisgarh, nearly 40 per cent of the people live below the poverty line. Various districts in these states, also identified as backward districts by the Niti Aayog, fare very poorly in terms of various human development indicators such as nutrition and health, mortality rate, access to clean water, sanitation and education, among others.

With a huge non-lapsable and an untied resource cover, clear objectives guiding the implementation, targeted beneficiaries and focussed intervention areas, DMFs hold a huge promise to address years of deprivation and inequality afflicting people living in India’s mining areas. “The Government had rightly observed that DMF and PMKKKY are ‘revolutionary’ steps. However, the success of this move now lies in its relevance to, and participation of the people, and the transparency and accountability mechanisms through which the institution operates in the coming years,” said Bhushan.

CSE’s recommendations

“The core mandate of DMF is to work for the interest and benefit of people and areas affected by mining related operations, and it is this directive that should assume top priority. In addition, DMFs should also function with utmost transparency and accountability so that the promise that it holds can be realized,” added Bhushan.

To enable DMF to deliver its intended mandate, there are three important aspects that need to be addressed– institutional and administrative gaps, planning and budget allocations and a scientific approach to the planning process:

  • Register all DMF Trusts.

  • Set up DMF offices for activities like coordination, planning, monitoring and accounting – with full-time staff. There should also be an active engagement with subject experts and line department officials.

  • Each mining district should provide all information related to DMF on specific websites for the purposes of transparency and accountability.

  • Invest on social capital and not on physical capital. Some critical issues to concentrate on should be nutrition and food security, clean water access, healthcare and education.

  • Focus on improving livelihood opportunities in mining affected areas, particularly around local resources.

  • Set aside money for future security. Mining areas often suffer from the problem of becoming ‘ghost towns’ once mining ends. This should not be the case now that DMFs are in play.

  • Determine the focus areas of intervention and prioritise issues through proper scientific assessment, taking into account the views of mining-affected communities.

  • Undertake scientific and comprehensive planning to address immediate as well as long -term needs and provide future security. 

  • Perspective planning must be undertaken to address immediate and long-term needs and sustain investments.

  • DMFs can converge and integrate with other schemes of the Centre and state governments. This should however, be done only after thorough assessment of gaps.

  • A bottom-up planning process must be followed by involving Gram Sabhas as per the mandate of the law. 

 

A copy of the report is available here:

For more on CSE’s work on DMF please visit:

For further information on the release of the DMF Status Report please contact Hemanth Subramanian, CSE Media Resource Centre; 9836748585; hemanth@cseindia.org

 

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