Parliamentary Panel Raises Alarm Over Misuse of District Mineral Foundation Funds

Concerns Over Fund Diversion

New Delhi: A recent report from a parliamentary committee has highlighted serious issues regarding the misallocation of funds from the District Mineral Foundation (DMF) across various states, indicating that these funds are being used for purposes not aligned with the welfare of mining-affected communities.

The DMF serves as a statutory fund established for districts impacted by mining activities, operating under the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY). Its goal is to ensure that financial resources are utilized effectively to tackle the challenges faced by local communities and promote sustainable development.

The committee expressed its alarm over numerous instances where DMF funds have been diverted for unauthorized uses, as reported by the Ministry of Mines. These diversions often involve transferring funds to state treasuries or other state-level funds, including the Chief Minister's Relief Fund, which undermines the original intent of the DMF.

Such actions are seen as violations of the mining act that established the DMF, thus defeating its purpose. The committee has urged the mines ministry to take strict measures against these unauthorized fund transfers and to keep them informed of any such incidents.

To deter future diversions, the committee suggested that penalties be imposed on DMFs involved in such practices.

Currently, DMFs have been established in 645 districts across 23 states in India. As of January 2025, the total funds collected under the DMF amount to Rs 1,04,250.74 crore, with 3.69 lakh projects worth Rs 88,483.24 crore sanctioned, of which 2.08 lakh projects have been completed, utilizing Rs 55,923.65 crore.