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Mineral fund "fails to benefit" people living in deep poverty in India's mining districts

Counterview Desk
The Parliamentary Standing Committee on Coal and Steel in its Forty-Seventh Report (Sixteenth Lok Sabha) on "Implementation of District Mineral Foundation (DMF) and Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)", relating to the Ministry of Mines, has regretted that out of of 81,624 projects sanctioned under the DMF, only 22,026 projects worth Rs 4,888 crore have been completed since 2015.
Set up in 2015, DMF is meant to benefit millions of mining affected people living below poverty line, the Committee, Submitted in Parliament on December 27, 2018, notes in its report, but regrets, “Even after a lapse of more than three and a half year of its implementation, there has been a lack of transparency and public accountability in implementation of various schemes under PMKKKY financed by DMF budgets.”

Excerpts from the report:

As against a total collection of Rs 21,235 crore as on August 2018 under DMF, projects worth Rs 15,548 crore only have been sanctioned so far. Out of a total 81624 projects sanctioned, only 22,026 projects worth Rs 4888 crore have been completed so far, reflecting non-initiation of schemes under DMF in some states and slow spending pattern in other States where schemes have been approved.
The Ministry of Mines has submitted that the setting up of DMF took some time in the initial stage and expending has picked up in the current fiscal year. For this purpose, the Ministry is following up the issue with the State Governments and holding regular meetings to review the progress for ensuring effective and efficient implementation of the scheme.
The Committee is aware that each DMF has to prepare Annual Plan and get it approved by the Governing Council and they have to act accordingly. The Committee expresses its disappointment at such tardy pace of implementation of various schemes being implemented under the DMF.
The Committee feels that the DMF is a defining opportunity in benefiting millions of mining affected people living in deep poverty in country's mining districts and it is very important and crucial that DMF is implemented in the letter and spirit of the Mines and Minerals (Development & Regulation) Act, 2015 and States Rules framed under it.
The Committee, therefore, strongly, recommends that the Ministry of Mines should work out a suitable monitoring mechanism for ensuring that the funds for the designated objectives are allocated and utilized within the stipulated timeframe and provision must be made for fixing of accountability in the case of unnecessary delays in implementation of DMF related schemes/projects. The Committee would like to be apprised of the action taken by Ministry of Mines in the matter.
Priority to people directly affected
As per the directions issued by the Ministry to all State Governments, at least 60% of funds collected under DMF are to be utilized for PMKKKY schemes for high priority areas like: (i) drinking water supply; (ii) environment preservation and pollution control measures; (iii) health care (iv) education; (v) welfare of women and children; (vi) welfare of aged and differently abled people; (vii) skill development; (viii) sanitation.
The rest (40%) of the funds to be utilized 26 for other priority works like: (i) physical infrastructure; (ii) irrigation; (iii) energy and watershed development; and (iv) any other measures for enhancing environmental quality in mining districts.
In this regard, the Committee notes that out of the total amount of Rs 15,547 crore sanctioned so far, an amount of Rs 10,567.46 crore has been earmarked for high priority work and the rest Rs 4980.37 crore for other priority work.
The Committee, however, is of the opinion that while extending the benefits of various schemes/projects under the PMKKKY, instead of the existing stress on spending 60% of the funds on high priority areas, there is a need to give overriding priority to the people living in the areas 'directly affected' by the mining activities instead of diverting such funds to indirectly affected people and areas.
The Committee, therefore, recommends that the Government may suitably amend the PMKKKY guidelines and also issue appropriate directions to the States to suitably amend their DMF rules so as to prescribe that 60% of the DMF funds must be spent on the people living in 'Directly Affected' areas.
Monitoring of DMF/PMKKKY
Even after a lapse of more than three and a half year of its implementation, there has been a lack of transparency and public accountability in implementation of various schemes under PMKKKY financed by DMF budgets.
In the opinion of the Committee, public accountability and transparency can be achieved by sharing all DMF related information in public domain through a DMF website which may provide information like composition of Governing Councils and Managing Committees, Fund accruals, list of beneficiaries, list of directly affected areas etc.
In this regard, the Committee notes that the Ministry of Mines have not devised any effective monitoring mechanism for ensuring transparent implementation of DMF/PMKKKY guidelines and rather empowered the State Governments for implementation of DMF.
As a result the performance of DMFs has not been found encouraging. Despite substantial collections under DMF, the schemes or projects have not been flagging off nor being completed at the desired pace.
As regards the monitoring mechanism devised at the Central Level to ensure transparent implementation of Guidelines, the Committee are informed that the Ministry of Mines vide letter dated February 17, 2017 has directed the State Governments to bring the monitoring of PMKKKY scheme under the ambit of District Development Coordination and Monitoring Committees (DISHA), an initiative of Ministry of Rural Development to ensure effective monitoring of PMKKKY and for better coordination/ synergy among the schemes of complementary nature.
In this regard, the State Governments of Chhattisgarh, Karnataka, Maharashtra, Telangana, Himachal Pradesh, Kerala and Uttar Pradesh have brought the monitoring of PMKKKY under DISHA monitoring mechanism. A national level portal was launched on March 20, 2018 and subsequent a District level portal has been developed on August 21, 2018. The portal is live and DMF officials have been directed to fill all the DMF related information in the portal.
The Ministry has also informed that some States like Gujarat, Odisha, Chhattisgarh, Rajasthan, Madhya Pradesh have also developed State portals and these portals will be integrated with the Central portal. Further, training on data feeding in 19 out of 21 major mineral rich States has been conducted from August 27, 2018 to September 6, 2018.
In light of the fact that the District level portal has been developed of late and training programmes on data feeding is still underway, the Committee recommends that till DMF related information in the portal are actually made available, necessary steps may be taken for dissemination of all DMF related information by displaying the same al teast in all district and panchayat level offices as well as through public meetings and other awareness programmes.
Auditing of accounts of DMF
As per PMKKKY guidelines, the accounts of the DMF shall be audited every year by a Chartered Accountant appointed by the DMF, or in such other manner as the State Government may specify, and the report shall be placed in the public domain alongwith the Annual Report and provision has been made that every year, within three months from the date of closure of the financial year and each DMF shall prepare an Annual Report on its activities for the respective financial year.
Further, the State DMFs shall furnish the details of the fund collection, amount spent and projects undertaken to the Ministry of Mines by the 10th of every month for the previous month. Necessary instructions are issued to the States where the progress is not satisfactory.
In this regard, the Committee notes that recently in a Coordination-cum-Empowered Committee (CCEC) meeting held in Ahmedabad on October 12, 2018, the Ministry had advised all the States for effective and efficient implementation of the PMKKKY scheme. The Ministry is also reported to be planning for a national workshop on PMKKKY, where representatives of all important States and DMFs will participate.
The Committee is, however, not satisfied with the reply of the Ministry as it has only referred to the Guidelines framed by it for implementation by the States and DMFs and not made any mention of the specific initiatives taken by it towards achievement of the objectives of the program. Even the CCEC meeting where implementation of PMKKKY schemes was deliberated with the State Governments was held only after being pointed out by the Committee to the Ministry at their sitting held on October 3, 2018.
The Committee feels that the Ministry should play a proactive role and take serious efforts to ensure proper implementation of the DMF schemes by the States and should hold review meetings at regular intervals. The Committee also desires that in order to channelize the huge sum of money collected under DMF for the targeted group, the Ministry should hold regular follow up meetings every three months with the State Governments.
The Committee would also like to be apprised of the audit conducted by all States for funds collected under DMF and the action taken by the Ministry against defaulting States.
Need for public feedback on DMF performance
DMF being an extremely important scheme for people affected by mining activities, it is very important that DMF should be subjected to both financial and performance audit for assessing the performance of DMFs. At the same time feedback from the people living in the mining affected areas is also very important in determining the adequacy and efficiency of the DMF functioning in their areas besides providing the affected people with an opportunity to scrutinize various developmental initiatives being implemented for them.
This process would also educate the people and make them aware of their rights and entitlements under the DMF. The Committee, therefore, strongly recommends that the Ministry may suitably revise the existing guidelines so as to prescribe for a kind of social audit of DMF involving participation of the people of the mining affected areas in the scrutiny of various schemes/projects being implemented under the DMF finance.
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Download full report HERE

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