District Mineral Foundations (DMF) must prioritise investments for mining-affected people through proper planning and engaging with Gram Sabhas

In a public meeting, CSE discusses the status of DMF and PMKKKY scheme implementationin Chhattisgarh based on its 2018 assessment report 

  • Nine districts of Chhattisgarh surveyed by CSE. In-depth analysis done for Korba, Dantewada and Raigarh
  • With more than Rs 2,900 crore, Chhattisgarh one of the top three states in terms of DMF collection in India. About Rs 3,133 crore sanctioned for projects under DMF for next three years. Utilisation is50 per cent
  • DMF investments ad-hoc in most districts, in absence of need-based planning. Investments heavily focused on physical infrastructure including roads and bridges; critical issues such as child nutrition and healthcare ignored by most districts
  • Gram Sabhas not engaged yet on DMF planning or monitoring which the DMF law requires, mining-affected people have poor knowledge of their rights under DMF and PMKKKY
  • District DMF body dominated by government officials and political representatives; poor representation of people.
  • As a ‘Settlor’ of DMF Trust, the state government has taken a central role in DMF administration and deciding DMF investments. Going against the spirit of the DMF law, the Settlor has over-riding and discretionary powers toinclude/ban any scheme/project to be undertaken by DMF
  • Public accountability mechanisms still weak. Many districts still have not done yearly financial audits. No district has done a social audit as required by Chhattisgarh DMF Rules.
  • As way ahead for DMF and PMKKKY’s success, the CSE report emphasizes on people’s engagement in DMF bodies and decisions,proper administrative set-up of DMFs, a systematic planning process, and transparency and accountability mechanisms.  

Raipur, September 7, 2018: District Mineral Foundations (DMF) and the associated Pradhan Mantri KhanijKheshtra Kalyan Yojana (PMKKKY) scheme, are not being implemented in its true spirit in Chhattisgarh, points out the only independent assessment of DMF and PMKKKY scheme as done by the Centre for Science and Environment (CSE), a New Delhi based non-profit policy think tank and public interest research institute. 

People First: District Mineral Foundation (DMF) Status Report, 2018 – as the report is called -- is an in depth assessment of DMFs across the country as it enters its fourth year. The report covers 12 states in India, and closely studies the DMF administration and investments in 13 districts in the top five states, including Chhattisgarh. 

The report and its findings, specifically with respect to Chhattisgarh, were discussed today in a public meeting in Raipur. The meeting was attended by officials of the Chhattisgarh Mines Department, official of biggest mining district Korba, various civil society members, NGOs and media. Earlier on July 31, the report was released nationally in New Delhi, in the presence of representatives from the state and Central governments, district administrations from mining-affected districts, NGOs and media. 

“DMF is a huge opportunity to improve the lives and livelihoods of some of India’s poorest and most deprived people who have over years been adversely affected by mining activities. The law as framed is also a crucial opportunity to ensure people centric governance and decision-making.  However, for this DMFs need to be developed and implement well” said Srestha Banerjee, Banerjee, programme manager, environmental governance unit, CSE. 

The CSE report has emphasized on proper administrative set-up, people’s participation in DMF bodies and decisions, a systematic planning process, and transparency and accountability of DMFs for its success. 

Anurag Diwan, Joint Director, of Chhattisgarh Mineral Resources Department, present at the event said “the state government is taking action on many of this. Transparency and accountability is a key focus of the state government”, added he. 

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 Chhattisgarhcurrently is more than Rs. 2,900 crore. The topmost districts in the state in terms of DMF collection are Korba (Rs 674 crore), Dantewada (Rs 216 crore) and Raigarh (Rs 122 crore), figures as of May 2018. 

People excluded from DMF decision-making bodies

There is no scope for representation of mining-affected communities in the DMF bodies in Chhattisgarh- the Governing Council and the Managing Committee. The DMF body is dominated by district officials and political representatives from mining areas. The only ‘people’s representation’ comes from a few elected members of Panchayati Raj Institution (PRI). Not only so, even after 3 and half years, mining-affected people have extremely poor knowledge of their rights and benefits under DMF and PMKKKY. 

The state government is also playing a nodal role in DMF administration and directing investments. Firstly, an over-riding power has been given to a Settlor (who is the state mines secretary) to include or scrap any projected he/she deems fit, under the Chhattisgarh DMF Trust Rules of 2015. Secondly, the state has further amended its Rulesto include “public welfare” as a high priority area for investment, opening another caveat for the state to include any state or central government scheme it deems as priority. Currently, investments for Pradhan MantriUjjawalaYojna is being made in districts . 

DMF Trust beneficiaries not identified yet, no engagement of Gram Sabhas as the law mandates

DMF is a Trust that is operating in every district without identifying its beneficiaries, the mining-affected people, highlights the CSE report. This is a fundamental obligation of DMF Trusts, as the law clearly defines the mining-affected people who must be identified and benefit through DMF.“These not only involve people who are living in mining-affected areas, but also those who have been displaced and resettled, lost their livelihoods including forest-based livelihoods, and those who had user and traditional rights over the land” said Srestha. 

By not identifying the beneficiaries, DMFs have left out some of the worst-affected people from the benefits of DMF shows the CSE report. 

The problem has however been acknowledged now by Chhattisgarh. Dinesh Mishra, Deputy, Director, mineral administration of Korba district said that the district has recently started the exercise. In September, the district has listed beneficiaries of DMF from some of the directly-affected areas. The list has more than 3000 people as of now. The district is finalizing the list and the entire beneficiary list will be notified and shared in public domain. 

Besides, leaving out beneficiaries, DMFs have not fulfilled its other obligation of engaging Gram Sabhas in DMF decisions. This goes against the mandates of the MMDR Amendment Act as well as the state Rules and PMKKKY guidelines, all of which emphasize on Gram Sabha engagement, particularly in Scheduled Areas for deciding on DMF works, monitoring and identifying beneficiaries .The whole of Korba and Dantewada, and part of Raigarh (including mining areas) are classified as Schedule V areas. 

“There is little information available showing that Gram Sabha consultation has happened for identification and approval of works to be done through DMF funds or for identifying beneficiaries” says Chinmayi Shalya, Deputy Program Manager of CSE , who has particularly communicated with officials and visited mining-affected communities at time of CSE assessment. 

Most community members from various mining districts , such as Korba, Raigarh, Dantewada, Balodabazar, repeatedly pointed out the poor knowledge of people on DMFs. They also demanded that Gram Sabha must be consulted for DMF planning as people can best tell their needs. The top down decision-making can make DMF a failure, feared many. 

DMF investments poorly planned: Construction-driveninvestments and an urban focus leaves out some worst hit mining areas

With more than Rs. 2,900 crore, there is huge scope for the mining district’s of Chhattisgarh to address some of the pressing issues of the mining-affected communities. However, this can only happen if DMFs develop investment plans through proper need-based assessment is a core prescription of the CSE report.  “This involves analyzing shortfall of factors in the mining-affected areas, engaging with Gram Sabhas and mining-affected people to prioritize their needs, and finally developing proper investment plans to improve these conditions” says Srestha. 

However, no district has developed a comprehensive DMF plan to ensure need-based investments in mining-affected areas. The work sanctions so far are adhoc

About Rs 3,133 crore has been sanctioned in Chhattisgarh for projects under DMF at the time of CSE research. About 28 per cent of this is for constructing roads and bridges. The investment in this is high in all 3 districts analyzed by CSE- Korba, Raigarh, Dantewada. For instance, Raigarhhas directed 40 per cent of its Rs 123 crore investments towards construction of roads and bridges. Dantewada too has invested about 34 per cent of its Rs 380 crore budget for this. 

In other sectors too, the sanctions so far are heavily focused on construction of physical infrastructure. A classic example is the education sanction in Korba. About70 per cent of theRs.311 crore education sanctions it is for building oneeducation hub in the town. 

“The district has picked the right issue. However, given the high drop-out rate in schools, and shortage of teaching staff , the district should have considered simultaneous investments in addressing the various resource gaps in schools to make education more accessible to those living in the directly mining-affected areas,” says Chinmayi Shalya. 

CSE’s analysis of the investments also shows a trend among districts to invest sizeable share of DMF funds in areas which are not directly-affected by mining operations. In Korba, about 46 per cent investments are in urban areas even when 75 per cent of the district’s directly-affected villages are located in the rural parts. The urban investments range from construction of multi-level parking lots, convention halls and bus stops to investments in an urban project like the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). These are strictly urban development projects which have no bearing on the mining-affected areas to begin with, said Srestha 

Similarly, Dantewada has invested 25 per cent of its total sanctions in Geedam, where the proportion of villages directly affected by mining is miniscule. Worst affected blocks like Kuwakonda have only 12 per cent of total investments so far.“These investments go against the fundamental principle of DMF, that funds must be used for those worst affected by mining-related operations,” Srestha added. 

Critical issues missed out in first three years of sanctions

Despite high malnutrition and under five mortality rate (U5MR) in all mining-affected areas, some of which are also tribal areas, all districts have largely overlooked issues of women and child development. In Raigarh, for instance, about 75 per cent of the total investments is going only for physical infrastructure, the Pradhan MantriUjjawalaYojna and electrification of villages, the last two being the state government’s mandates. 

Dantewada has invested only 1.6 percent of its total funds on women and child development despite 45 per cent of its children under the age of five growing up stunted and more than 53 per cent being underweight. 

Healthcare investments have been largely overlooked in Korba and Raigarh. “If proper planning was done, child nutrition, healthcare and drinking water would have been the top priorities for all three districts,” said Srestha.Dantewada is an exception here. The district has invested Rs 51 crore (13.4 per cent of total investments) in healthcare – on infrastructure building and hiring of healthcarepersonnel, especially doctors. 

CSE recommends

  • Intended autonomy of DMF Trusts should be maintained; state governments shall only provide necessary guidance to ensure proper planning, investments and 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 operations, 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. To ensure people’s access, information should be shared by using panchayat-level platforms.


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