Madhya Pradesh spending 40 per cent of District Mineral Foundation {DMF} funds meant for other priority areas, on construction of roads -- says CSE’s latest analysis

CSE releases the crucial 2018 assessment of the DMF scheme.

Madhya Pradesh one of the top five mining states assessed closely

  • Report analyses 12 mining states. Does in-depth assessment of five major mining states, including Madhya Pradesh
  • Five districts surveyed. In-depth analysis done for Singrauli
  • Madhya Pradesh’s (MP) total cumulative accrual -- Rs 1,610 crore till April 2018. More than 57 per cent from its biggest coal mining district,Singrauli.
  • About Rs 580 crore sanctioned for projects under DMF; biggest investment of about 47 per cent is for physical infrastructure like roads, only14.5 per cent for education. Utilisation: only 39 per cent
  • State government playing central role in directing DMF investments. The state Rules have created a State Mineral Fund (SMF). Projects to be done through SMF to be decided by state finance department
  • State government has issued directions for areas where DMF funds in districts must be spent -- drinking water, health and education among high priority areas. However, it has also asked for 40 per cent of the DMF fund to be only spent on construction of roads
  • No planning; no consultations with Gram Sabhas; district DMF body dominated by government officials and political representatives
  • Critical issues like women and child development, healthcareetc ignored 
प्रेस विज्ञप्ति

मध्य प्रदेश, अन्य प्राथमिकता वाले क्षेत्रों के लिए जिला खनिज फाउंडेशन {डीएमएफ} निधि का 40 प्रतिशत, सड़कों के निर्माण पर खर्च कर रहा है। - सीएसई का नवीनतम विश्लेषण।

New Delhi, July 31, 2018: The administration of DMF in Madhya Pradesh (MP) is top-down and has very poor representation of the mining-affected people. The DMF investment priorities have been determined largely by the state government, and hence are not oriented towards the areas that really need the intervention (such as healthcare) – says a latest assessment by Centre for Science Environment (CSE) of the state of DMF in MP. 

People First: District Mineral Foundation (DMF) Status Report, 2018 – as the report is called -- is an assessment of DMF as it enters its fourth year. The report covers 12 states in the country, and closely studies the investments in 13 districts in the top five states, including MP. The report was released in the presence of representatives from the state and Central governments, district administrations from mining-affected districts, NGOs and media. 

“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 SunitaNarain, director general, CSE, while releasing the report. 

DMFs have been instituted to be established as a non-profit Trust in every mining district of the country under the Mines and Minerals (Development and Regulation), Amendment Act, 2015. They have a precise and legally defined objective to work for the interest and benefit of persons and areas affected by mining-related operations. 

The DMF collection in MP is Rs 1,610 crore till April 2018. The topmost districts in the state in terms of DMF collection are Singrauli (Rs 470 crore), Anuppur (Rs 225 crore) and Satna (Rs 85 crore). 

“DMF is a defining opportunity to overturn the decades of injustice meted out to the millions of people living in deep poverty and deprivation in India’s mining districts. But DMF can only deliver if it is implemented in the letter and spirit of the DMF rules under the Mines and Minerals (Development and Regulation), Amendment Act, 2015. Our assessment shows that so far MP has failed to implement DMF in the right spirit,” said Chandra Bhushan, deputy director general, CSE.

People excluded from planning and decision-making
MP is the only state to create a parallel state-level corpus called the State Mineral Fund (SMF), which is funded through DMF collection in districts in varied proportions. A district like Singrauli is supposed to pay 50 per cent of its Rs 300 crore annual estimated collection to the SMF. The decisions on the use of SMF are taken at the state government level for investments in various districts, which is contrary to the principle of decentralised planning that DMF stands for. 

In October 2017, the state government set the priorities for the DMFs in districts to follow. It asked for DMF funds to be spent on four areas -- drinking water supply, health, education and physical infrastructure. For physical infrastructure, the state government asked for utilisation of the entire 40 per cent fund ceiling allowed for “other priority areas” as provided in state DMF Rules. 

“While the directive does set the focus on some pressing concerns, it removes the scope for district-specific need-based planning,” said Srestha Banerjee, programmemanager, environmental governance unit, CSE. The district DMF body is dominated by officials and political representatives. The only “public representation” is through a few elected panchayati raj institution members.

No district has developed a comprehensive DMF plan assessing the immediate and long-term needs of the people, despite the state Rules clearly stating that five year perspective plans be developed for DMFs and that beneficiaries -- the mining-affected people -- be identified through Gram Sabha consultation. The work sanctions so far are adhoc

“The Gram Sabha has been completely marginalized in DMF implementation in MP. For instance, the identification of beneficiaries for the DMF has not been done so far. The Gram Sabha has a clear role in the identification. This has left out some of the worst-affected people – those displaced due to mining operations and those with traditional rights on the land that is being mined – from the benefits of DMF,” adds Bhushan. 

Lack of planning and coordination, and information in the public domain
The report also finds that DMFs in the state have been functioning without a planning and co-ordination office. A full-time DMF office comprising planning experts who can do a gap-analysis, conduct consultations with the Gram Sabha and plan DMF investments based on the district’s resources, is a must,” said Srestha. 

MP has set up a DMF portal for putting out district level information. However, the details available are limited to DMF members, accruals and sanctions, projects undertaken and in some cases, information on the operational mining projects. No meeting minutes, list of beneficiaries, mining-affected areas and annual reports etc. are available in public domain. The state Rules and the Centre’s flagship scheme -- Pradhan MantriKhanijKheshtraKalyanYojana (PMKKKY) -- aligned to DMFs, mandate that all details on DMF be provided in the public domain. 

Construction-driven investments
Overall, Rs 580 crore has been sanctioned from DMF in the state for projects in various districts. Of this, 47 per cent sanctions are for physical infrastructure and only14.5 per cent for education.

While the state has prioritised on education, the sole focus of investments remains construction. For instance, of the total Rs 184 crore sanctions in Singrauli, about 25 per cent is for education, but directed primarily towards construction and renovation of schools. The healthcare sanctions (about 17 per cent of the total sanctions) are also construction-oriented. 

“The investments are on crucial issues, but fail to address the resource gaps. More than half the elementary schools in the district do not have enough teachers and also have a high drop-out rate of about 22 per cent at the same level. Similarly, ground experiences show inadequate health staff in health centres. Hence, simultaneous resource building is vital to make effective investments,” said Srestha. 

Missing pressing issues due to lack of proper planning
Despite some of the worst women and child development indicators, no investments have been made so far for improving nutrition status, particularly of children. The rural under-five mortality rate (U5MR) in the district is 120, and about 39 per cent children in the same age-group are underweight.

There is negligible allocation for drinking water (about 4 per cent), which is mostly for hand-pumps and tubewells. “Scientific reports have categorically mentioned high levels of fluoride and nitrate content in groundwater which these investments would be harnessing. Alarming levels of mercury contamination have also been found in the district,” said Srestha. “Nutrition, healthcare and water are the core issues which would have been a priority had participatory planning and gap-analysis been done in the district,” she added. 

The CSE assessment shows that DMF in MP is being treated like a general development fund by the state government. “The creation of SMF shows that the state wants to keep DMF as a corpus for uses it deems fit, rather than bottom-up need assessment,” said Srestha. So far, investments through SMF are concentrated around constructing model schools, undertaking water supply, effluent treatment works, rainwater harvesting etc, with no clear prioritisation for mining areas. 

CSE recommends

  • The intended autonomy of the DMF Trusts should be maintained; state governments shall provide necessary guidance to ensure proper planning, investments, functioning of the trust.
  • All districts must identify DMF beneficiaries; there cannot be a Trust without beneficiaries. This will also help in targeted investments such as for addressing women and child development issues.
  • Gram Sabhas (and ward members where applicable) should have a representation in the DMF body. Not following this is in contravention to the spirit of the DMF law.
  • For efficiency of operation, all DMFs must have an office comprising of officials and experts. Independent organizations/ planning experts can be roped in from time to time for effective planning.
  • DMFs must undertake perspective planning to address immediate as well as long-term needs of the people and areas affected by mining. An “outcome” oriented approach should be adopted to ensure long term improvements. Intermediary activities as planned to achieve such outcomes should be monitored from time to time.
  • A systematic and bottom-up approach must be adopted to make investments effective. The potential can also be improved by considering convergence with other programmes of the central and state governments once priority issues are determined.
  • Public disclosure of information is key to DMFs transparency of operation. District-specific DMF related information must be made available through a website. Also to ensure people’s access, information should be shared by using panchayat level platforms. 

“As we enter fourth year of DMF implementation, it is time we sort out the planning and implementation issues. Without bottom-up planning and proper institutional structure, DMF will not be able to deliver. We need the involvement of the beneficiaries in planning and monitoring, to make DMF transparent and accountable. Let this be the agenda for the coming year,” summarisedBhushan.

  • For interviews and any other assistance, please contact ParulTewari of The CSE Media Resource Centre – / 9891838367