Indian states 'failing' to utilise 30% mineral trust funds meant to fight Covid-19?

By Dheeraj Kapoor*

No nation in the world has been left untouched by the harsh aftermaths of the Covid-19 pandemic. India is no exception and the state governments in the country found their backs firmly against the walls in their effort to arrange for funds to combat the pandemic. 

The Government of India identified District Mineral Foundation (DMF) funds as one monetary source to fight the disease as it announced in late March 2020 that states could use up to 30 percent of the balance DMF funds to deal with Covid-19. A DMF is a non-profit statutory ‘trust’ which was set up in every district affected by mining-related operations to protect the interest and benefit the local people using the contributions of mining companies.
The extent of DMF funds used in different parts of the country to fight Covid-19, based on the updates in different publications, suggests that the funds have been sanctioned only in few regions.

Odisha

When it comes to the size of DMF funds, Odisha is right at the top with a collection of Rs 9,500 crore followed by Jharkhand at Rs 5,180 crores and Chhattisgarh at Rs 4,980 crore till January 2020. Among the different districts with DMFs across the country, Keonjhar district has the highest collection of Rs 4,000 crore. The district allocated Rs 7.4 crore for tackling the pandemic.
The funds were aimed at a range of functions comprising augmenting health facilities such as primary health centers, community health centers, the sub-divisional and district hospital; employing paramedical personnel; establishing a dedicated hospital for Covid-19, quarantine facilities; awareness campaigns, screening and personal protective equipment (PPE).
Another prominent mining district in the state, Sundargarh, has permitted Rs 5 crore for this purpose. It includes setting up isolation centers and an exclusive hospital to treat Covid-19 cases besides procuring purchased ventilators and ambulances. The Government of Odisha also demanded the removal of the 30 percent ceiling on the use of DMF funds to handle Covid-19 cases citing that it limits the scope of efforts to combat the pandemic.

Rajasthan

Bhilwara in Rajasthan became a focal point in the state when it recorded a high number of Covid-19 positive cases and the efforts of the local authorities in treating and controlling the spread of the pandemic received appreciation. Bhilwara, which has the largest mining activity in the state, has around Rs 1,200 crore of DMF collection.
It approved Rs 2.4 crore to obtain ventilators, masks, and sanitizers besides arranging cooked food for stranded migrants. The districts of Pali and Rajsamand also sanctioned Rs 86 lakh and Rs 30 lakh respectively for dealing with Covid-19. The Department of Mines and Geology, Rajasthan confirmed that the affected districts have been authorized to use the 30 percent of DMF funds in consonance with the Union Government’s directions.

Maharashtra

Nagpur in the industrialized state of Maharashtra was reported to allocate DMF funds to treat Covid-19 cases. As per the information shared by the district administration, Nagpur district had Rs 155.78 crore of DMF funds in March 2020 and it set aside Rs. 27.69 crores for dealing with Covid-19.
Of this amount, Rs 13.18 crore was assigned to the Government Medical College and Hospital (GMCH), Rs 14.51 crores to the Indira Gandhi Government Medical College and Hospital (IGGMCH), and Rs. 5 crores to provide essential commodities including food grains, grocery items, and vegetables to stranded workers and slum-dwellers.
The Rs 13.18 crores fund for GMCH was for developinga 400-bed isolation ward and 200-bed intensive care unit (ICU) and acquiring procurement of equipment including testing kits and medicines. The Rs 14.51 crore for IGGMCH aimed at establishing a 600-bed isolation ward and procuring medical equipment, and medicines.

Goa

The Chief Minister of Goa, Pramod Sawanta, few days after the decision of the Union Government to allow the use of DMF funds to fight Covid-19, announced that Rs 52 crore from the total DMF fund of Rs 190 crore would be used to manage Covid-19 cases. The CM soon announced the decision to deploy Rs 120 crore of the Rs 400 crores from the Goa Iron Ore Permanent Fund (GIOPF) for the same purpose.
The GIOPF was set up on the order of the Supreme Court in 2014 funded by 10 percent of the sale of proceeds of iron ore extracted in the state by the lessees for sustainable development and inter-generational equity. Both the funds have largely remained unutilized. The environmental action group, Goa Foundation, opposed the use of mining funds for this purpose stating that these funds are meant exclusively for the development of mining-affected areas.

Jammu and Kashmir

The District Development Commissioner of the Kishtwar district of the Jammu region in the Indian union territory of Jammu and Kashmir recently directed the District Mineral Officer to transfer 30 percent of the DMF funds in the district to the Chief Medical Officer for procuring various Covid-19 prevention equipment such as sphygmomanometer (BP apparatus),electrocardiogram(ECG) machine and N-95 masks. The district is known for having sapphire and gypsum reserves.

Karnataka

It was reported that the Center has allowed Karnataka to use Rs 384 crore of Rs 1,200 crore DMF fund for dealing with Covid-19. However, it has used only Rs. 21 crores, further details of which are not known.

Low spend

According to the Ministry of Mines, the total accrual in DMF trusts over five years is Rs 35,925 crore and an annual collection of Rs 6,000 crore is expected in the future. According to the Ministry, just Rs 12,414 crore of the total DMF funds has been spent as of January 2020. This amounts to a mere 35 percent of the total amount approximately.
Given the inadequacies of the public healthcare infrastructure, including the mining districts and the rising number of cases, the option of using a part of DMF funds should not be squandered away and efforts must be upped by the concerned government authorities to use the available fund to treat the Covid-19 case. 

This is vital to scuttle further spread of this pandemic that has derailed normal functioning in the country and across the world.
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*Social sector professional based in Mumbai