Chhattisgarh Offers Mixed Hope for District Mineral Foundation (DMF)

with more than Rs. 1042 crore funds collected after 2 yearssays first independent assessment of the scheme done by CSE

Report also finds that there are shortfalls on various fronts, from institutional and administrative issues, to planning and budgetary allocations

Chhattisgarh is one of the top three states in terms of DMF collection until the end of the 2016-17 financial year with a cumulative accrual of Rs. 1042 crore, besides Odisha (Rs. 1932. 5 crore) and Jharkhand (Rs. 1056 crore)
Five biggest districts in Chhattisgarh in terms of DMF accrual are Korba (Rs. 388 crore), Dantewada (Rs. 199 crore) and Janjgir-Champa (Rs. 77.28 crore), Balodabazar (Rs. 64 crore) and Raigarh (Rs. 52 crore)
Six major districts – Korba, Dantewada, Raigarh, Balod, Balodabazar and Korea – are sharing a percentage of DMF funds with adjoining districts depending on the extent of the area that are affected
The state is also considering using DMF funds for filling gaps in development of a railway corridor
The district which stands out in terms of a better contemplative budget is Dantewada. It has taken some particularly good and innovative approaches on issues such as healthcare, education and livelihood
Districts have missed out on pressing issues such as issues of nutrition, welfare of the vulnerable such as children, women, orphans, aged and disabled people, a common concern in all mining areas
The allocations at various instances are ad hoc and the plans mechanically list the number and types of works to be undertaken, without any elaboration on the rationale of planning
The administration is dominated by government officials with poor representation of people. DMFs have been functioning without a fixed administrative set-up, such as an office for planning and co-ordination, relying on intermittent meetings of the DMF body

New Delhi, June 13, 2017: “DMF is a defining opportunity to overturn the decades of injustice meted out to the thousands of people living in deep poverty and deprivation in India’s mining districts,” said CSE deputy director general Chandra Bhushan, releasing the Centre’s latest study on the status of District Mineral Foundation. The study was released in New Delhi on 8th June.

Established as a non-profit Trust, DMFs in every mining district have the precise objective to work for the interest and benefit of persons and areas affected by mining related operations. The CSE report is an independent review of the progress and performance of DMFs in various mining districts of India including Chhattisgarh. The report finds that there are shortfalls on several fronts including institutional and administrative issues, to planning and budgetary allocations.

The realities of Chhattisgarh allocation

The Chhattisgarh government is playing a Central role in directing districts on DMF planning and allocation. The government has asked all districts to account for allocations over three years, which shows some considerations for bigger and sustained investments. In addition, directions issued by the state government from time to time particularly focuses on two aspects – spending money in mining affected areas and using a part of DMF funds for regional development

The three districts analysed have made DMF plans for three years considering yearly estimated accruals. All have touched upon most of the ‘high priority areas’ indicated in the in the state DMF Rules and the Centre’s scheme for mining-affected areas, the the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY). However, allocations and approaches to address issues vary from district to district.

For instance, both Dantewada and Korba have allocated about 19% of their DMF funds to education. Dantewada has allocated 20% of its sectoral education budget on soft resources such as plugging the shortage of teachers and developing primary school syllabus in tribal languages to improve quality of education. Korba on the other hand, has earmarked 89 per cent of its education budget only for construction and renovation of schools and hostels, ignoring the imperative of improving quality of education.

Similarly, agriculture is another key area with sizeable allocations in Dantewada and Korba, with 18.5 % and 11.7% respectively. Korba has largely focused on irrigation, despite a separate irrigation allocation, and distribution of equipments. Meanwhile, Dantewada is using it as a livelihood generating option through organic and horticulture-based farming, apart from focusing on non-farm livelihoods. Raigarh district’s allocation for livelihoods and employment generation lacks any proper rationale particularly considering local resources. The district is rich in forests and biodiversity. However, instead of building livelihoods around these, it has allocated about 92% of its skill development budget – 11% of the districts total DMF budget – on a driving school.

“What can be broadly inferred from the first year of DMF budget of these districts, particularly Raigarh and Korba, is that the allocations require scientific and contemplative planning, keeping in mind the ground realities and requirements in mining affected areas. If this had happened, the districts would have not made such cursory allocations for healthcare. There is pressing need for resources in rural health facilities and a high burden of respiratory diseases in Korba and Raigarh owing to severe pollution,” said Bhushan.

It bears mentioning that Dantewada’s allocation for health care is commendable. The district has allocated 70% of its health budget for improving primary healthcare facilities, which includes sub-centres, primary health centres and community health centres, as well as resources at the district hospital.

“The biggest shortfall in allocations in various sectors is that there is undue focus on construction of physical capital. This is contrary to the basic objective of DMF to enhance social capital and deliver on fundamentals to enhance the lives and livelihoods of people in mining affected areas,” added Bhushan.

In addition, the administration is dominated by government officials, which goes against the basic tenets of DMF which calls for a people-led participatory approach to planning and execution. DMFs have been functioning without a fixed administrative set-up, such as an office for planning and co-ordination, relying on intermittent meetings of the DMF body

The state is also considering using DMF funds for filling gaps in development of a railway corridor, which again dilutes the focus of DMF, which is to deliver social justice to mining affected people.

About DMF

DMF was instituted in March 2015 under India’s central mining law, the Mines and Minerals (Development and Regulation) Act (1957). DMF has also been aligned to an important scheme of the Government of India, the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) that was launched in September 2015. According to the provisions of DMF, miners and mining companies are required to pay a sum to the DMF Trust of the district where the mine is located. This sum is determined on the basis of their royalty payments.

The fund is clearly a bounty for some of India’s poorest and under developed districts, many of which are in the country’s top mining states. In India’s top three mining states – Odisha, Jharkhand and Chhattisgarh, nearly 40 per cent of the people live below the poverty line. Various districts in these states, also identified as backward districts by the Niti Aayog, fare very poorly in terms of various human development indicators such as nutrition and health, mortality rate, access to clean water, sanitation and education, among others.

With a huge non-lapsable and an untied resource cover, clear objectives guiding the implementation, targeted beneficiaries and focussed intervention areas, DMFs hold a huge promise to address years of deprivation and inequality afflicting people living in India’s mining areas. “The Government had rightly observed that DMF and PMKKKY are ‘revolutionary’ steps. However, the success of this move now lies in its relevance to, and participation of the people, and the transparency and accountability mechanisms through which the institution operates in the coming years,” said Bhushan.

CSE’s recommendations

The fundamental fact about DMF is it is mandated to work for the interest and benefit of people and areas affected by mining related operations. Therefore, these people and the need of these areas should be put first and foremost. Also DMFs must function through utmost transparency and accountability so that the promise that it holds can be realized.

There are three important aspects that need to be addressed with respect to DMFs – institutional and administrative gaps, planning and budget allocations and a scientific approach to the planning process:

Register all DMF Trusts.
Set up DMF offices for activities like coordination, planning, monitoring and accounting – with full-time staff. There should also be an active engagement with subject experts and line department officials.
Each mining district should provide all information related to DMF on specific websites for the purposes of transparency and accountability.
Invest on social capital and not on physical capital. Some critical issues to concentrate on should be nutrition and food security, clean water access, healthcare and education.
Focus on improving livelihood opportunities in mining affected areas, particularly around local resources.
Set aside money for future security. Mining areas often suffer from the problem of becoming ‘ghost towns’ once mining ends. This should not be the case now that DMFs are in play.
Determine the focus areas of intervention and prioritise issues through proper scientific assessment, taking into account the views of mining-affected communities.
Undertake scientific and comprehensive planning to address immediate as well as long -term needs and provide future security.
Perspective planning must be undertaken to address immediate and long-term needs and sustain investments.
DMFs can converge and integrate with other schemes of the Centre and state governments. This should however, be done only after thorough assessment of gaps.
A bottom-up planning process must be followed by involving Gram Sabhas as per the mandate of the law.