Centre Takes Over Control Of District Mineral Funds From States Over Alleged Diversion For Other Activities

The central government has taken complete control over the district mineral foundation (DMF) funds and thus subsequently nullified the rights of the states to authorize any finances collected through the mandatory contribution made by mining lease holders.

The Ministry of Mines has officially stated that there have been occasions when a portion of the DMF funds have been transferred to the state’s treasury, their consolidated fund, the Chief Minister’s Relief Fund or other schemes, which end up subduing the very purpose of the DMF.

“No sanction or approval of any expenditure out of the fund of the DMF shall be done at the state level by the state government or any state level agency,” the ministry’s order from 12th July read, as per a report by the Financial Express.

The DMF funds are intended to be used for the welfare of people impacted by mining-related operations, which largely consists of the tribal population.

Back in March 2020, Union Finance Minister Nirmala Sitharaman had officially requested the state governments to use the DMF funds for the purpose of medical screening and medical testing at the district level.

Around 60 per cent of the DMF funds are mandated to be put to use for ‘high-priority sectors’ like education and drinking water supply. On the other hand, the rest of the 40 per cent is set aside for the purposes of cowshed development, physical infrastructure, energy amongst others.