Centre to direct states to utilise Rs 24.5k cr DMF funds for fight against Covid

The Act mandates state governments must establish DMFs in all districts affected by mining-related operations.

The Centre will soon direct states to better utilise the staggering Rs 24,500 crore, lying unspent with district mineral foundations (DMFs), in the fight against the pandemic. The Mines and Minerals (Development and Regulation) Amendment Act, 2021 empowers the Centre to give directions to states regarding utilisation of the fund under DMFs.

As per the latest government data, states have spent only Rs 21,512 crore or less than 50% of the Rs 45,977 crore accumulated so far under the DMF fund with contribution from mining lease holders.

The poor utilisation is despite Centre’s March 2020 suggestion, as part of the first tranche of the Atmanirbhar package, to the state governments to utilise the fund for augmenting facilities for medical testing, medical screening and other requirements to deal with Covid-19 pandemic.

As per the MMDR (Amendment) Act, 2015, lease holders are required to contribute to the not-for-profit DMFs between 10-30% of the royalty, in addition to the royalty paid to state governments. The Act mandates state governments must establish DMFs in all districts affected by mining-related operations.

Sources in the mines ministry said that a directive will be issued soon to the states to better use the fund to bridge the health infrastructure gap at the district and the state level and to provide necessary healthcare support to the people.

“We are considering all aspects to see how the DMF fund can be better used to fight against coronavirus. We are planning to issue some directions to the states as to where the fund can be used, how it can be used and others very soon,” said a senior official in the mines ministry. The direction may be issued in the next few days.

As per the guidelines, 60% of the DMF funds is to be used for ‘high priority sectors’ such as drinking water supply and education and the remaining 40% for ‘other priority sectors’ such as physical infrastructure, energy and cowshed development.

The DMF funds collections have been the highest in mineral-rich Odisha (Rs 12,186 crore), followed by Jharkhand (Rs 6,533 crore), Chhattisgarh (Rs 6,470 crore), Rajasthan (Rs 4,664 crore) and Telangana (Rs 3,000 crore).