Odisha tops District Mineral Foundation {DMF} collection with Rs 4,453 crore, but investments not reflecting the priorities of mining-affected people, says CSE’s latest analysis

CSE releases the crucial 2018 assessment of the DMF scheme. 

Odisha one of the top five mining states assessed closely

  • Report analyses 12 mining states. Does in-depth assessment of five major mining states, including Odisha
  • In-depth analysis of four districts – Keonjhar, Sundargarh, Angul and Jharsuguda
  • Odisha the topmost state terms of DMF collection, with a total cumulative accrual of Rs 4,453 crore till March 2018. About 65 per cent of this from mining of iron ore, chromite, bauxite etc
  • OverRs 2,588 crore sanctioned for projects -- more than 33 per cent for roads, bridges etc., about 25 per cent for drinking water supply. Utilisation: only 20.5 per cent
  • No proper planning; no consultations with Gram Sabhas; DMF administration dominated by government officials with poor representation of people; districts operating without a DMF office and dedicated staff
  • Physical infrastructure biggest mainstay of investments in all districts.Most districts have missed out on making targeted investments on issues such as healthcare, child nutrition or livelihoods  

New Delhi, July 31, 2018: Of the Rs 2,588.9 crore sanctioned so far for projects under DMF in Odisha, over 33 per cent is for building roads and bridges. In fact, the investments in such infrastructure have been alarmingly high – going up to almost 80 per cent -- in some areas. As a result, much more crucial problems, such as those of providing access to healthcare, have remained neglected. This is one of the key findings of a report by Centre for Science and Environment (CSE) released here today.

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 Odisha. 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 Odisha is Rs 4,453 crore till March 2018. The top four districts in the state in terms of DMF collection are Keonjhar (Rs 1,524 crore), Angul (Rs 836 crore), Sundargarh (Rs 780 crore) and Jharsuguda (Rs 275 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 Odisha has failed to implement DMF in the right spirit,” says Chandra Bhushan, deputy director general, CSE. 

People excluded from DMF planning and implementation
There is no scope for representation of mining-affected communities in district DMF bodies in Odisha. The DMF body is dominated by district officials and political representatives from mining areas. The only “people’s representation” comes from the few elected members of Panchayati Raj Institution (PRI). Gram Shabhas have been completely ignored. 

No district has developed a comprehensive DMF plan to ensure need-based investments in mining-affected areas. The work sanctions are adhoc

The role of the Gram Sabha, which has been clearly defined particularly for Scheduled V areas, has been completely sidelined. The whole of Sundargarh and parts of Keonjhar district are classified as Schedule V areas. The approval of the Gram Sabha is mandated for projects in these areas; the Gram Sabha is also supposed to identify the beneficiaries. “CSE’s assessment shows that in few cases where approvals have been taken from Gram Sabhas, it has been a formality, where the village heads are informed of the project and told to sign the papers,” saidSresthaBanerjee, programmemanager, environmental governance unit, CSE. 

“The non-involvement of the Gram Sabha in identification of beneficiaries has meant that some of the worst-affected people -- those displaced due to mining operations and those with traditional rights on the land that is being mined – have been left out from the benefits of DMF,” adds Bhushan. 

DMF administrative set-up inadequate
The report also finds that the districts do not have dedicated DMF offices for planning and monitoring. They have only setup Project Management Units (PMU) which are managed by private consultants for monitoring project implementation. “PMUs are no substitute for 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,”says Srestha. 

Construction-driven, misplaced investments
Over 33 per cent of the Rs 2,588.9 crore sanctioned for projects under DMF, is devoted to physical infrastructure like roads; about 25 per cent goes to drinking water supply projects.CSE’s analysis finds that the investments in physical infrastructure are alarmingly high in some areas. For instance, in Koida, the worst mining-affected block of Sundargarh district, a whopping 80 per cent of the DMF investments is for big infrastructure. 

Investments in other sectors like healthcare and education are also construction driven, ignoring the need for resources, both human and physical, to service the infrastructure. Most striking example here is in Keonjhar where the entire health sanction of about Rs 396 crore is for construction of one medical college in the town.“This is despite the fact that only about 4 per cent of the villages in the district have access to a primary health centre within a five-kilometer radius,” says Srestha. Recently, the district has advertised to hire doctors in some places. 

Investments in many cases are also misdirected and urban-centric, having to do nothing with mining-affected areas or people. For instance, in Sundargarh district, 68 per cent of the Rs 238 crore investment on drinking water is for piped water supply in municipal areas, which are not “directly-affected” by mining. “The district has justified this investment during a DMF body meeting giving an outlandish excuse that mining-affected people are also dependent on urban infrastructure,” says Srestha.

Similarly, in Jharsuguda, DMF funds worth Rs 13.2 crore have been sanctioned for providing power supply to the local airport. 

Missing crucial issues in mining-affected areas
Absence of proper planning and prioritization have left out some of the most critical issues that need urgent attention in Odisha’s mining-affected areas. 

One of the biggest issues emerging in all districts of Odisha is child nutrition. However, a negligible 1.8 per cent of the total sanctions in the state is for welfare of women, children and aged people. For instance, in Sundargarh, where about 50 per cent rural children are stunted and the rural under-five mortality is as high as 67, only Rs 3 crore has been sanctioned to address child nutrition out of the district’s Rs 745 croreallocation. “This is a big concern for all four districts assessed in Odisha, but unfortunately everywhere it falls very low on the DMF priority,” says Srestha. 

Equally neglected is healthcare, another pressing issue. Most districts not only face a shortage of health infrastructure but also healthcare staff, particularly doctors. Angul, where primary health centres (PHCs) and community health centres (CHCs) both have a 50 per cent deficit of doctors, has invested only 5.6 per cent of its Rs 242 croreallocation in healthcare. In Sundargarh, healthcare investment is a mere Rs 33 crore. “This is one-tenth of the money that the district is spending to build roads through DMF funds,” points out Srestha. 

The disclosure of information on DMFs in Odisha is probably the best in the country. Odisha is one of the states which has developed an online DMF website with district-specific information. The website contains details of the DMF trustees and members, fund allocation and expenditure, and minutes of meetingsof the DMF body. 


  • 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. PMUs cannot be substitute for a full-time DMF office.
  • The intended autonomy of the DMF Trusts should be maintained to ensure local need-based panning; state governments shallprovide necessary guidance to ensure proper planning, investments and functioning of the trust.
  • A systematic and bottom-up approach must be adopted to make investments effective. DMFs must not only focus on high priority issues, but also prioritize investments in directly affected areas.Proper bottom-up planning can also help to maximize the potential of the convergence approach the state is considering.
  • Public disclosure of information is key to DMFs’ transparency of operations. District-specific DMF-related information must be made available through a website. To ensure people’saccess, information should be shared by using panchayat-level platforms. 

“As we enter the fourth year of DMF implementation, it is time we sorted 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,” summarisedChandra Bhushan.

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