How mining fund is fuelling development in tribal areas
The mining fund is being used for bigticket projects. In Odisha, it’s helping build classrooms, while in Chhattisgarh it’s being used to supply potable water
150 poorest but mineralrich districts could get a major facelift in the next one year, coinciding with the 2019 general elections, provided the state governments are able to spend over ~18,800 crore they have from mining companies under the district mining fund.
The fund was created through an amendment in the Mines and Mineral (Development and Regulation) Act, 1957 by the National Development Alliance government, taking forward the idea first mooted by the United Progressive Alliance government when a new version of the mineral law was proposed.
The Centre, through a notification in January 2015, had asked the states to set up a district mineral foundation trust to share mining revenue.
For major minerals such as coal, bauxite, chromite, iron ore and manganese, the companies were required to share 10% to 30% of the royalty with the foundation. In case of minor minerals such as building stones, gravel and limestone, the state governments were given the power to decide the amount of royalty to be shared.
In over two years, mineral-rich states such as Odisha, Jharkhand, Chhattisgarh and Madhya Pradesh, where half of the country’s economically and socially backward districts are located, contributed about 75% to the fund worth ~18,867 crore, which meant about one-fourth of total development funds for the mineral rich districts, till the first week of May.
The money is to be utilised under the national scheme called Pradhan Mantri Khanij Kshetra being monitored by the mines ministry.
As per the guidelines, around 60% of the funds are to be used for big-ticket projects on drinking water, healthcare, education, environment and sanitation.
The remaining can be used for providing energy access, watershed management and irrigation.
However, the pace of spending the money has not been satisfactory. According to the mines ministry, projects worth ~8,579 crore have been approved but the expenditure till the first week of May was only 20%. The mines ministry is concerned about the slow pace of work.
“We have asked state governments to utilise money for two or three big schemes so that utilisation of the money improves and there is visible impact on the ground,” said a senior mines ministry official familiar with the matter.
The directive came after an analysis by the ministry showed that the states flush with funds were allocating the money to a large number of small projects. For instance, Chhattisgarh has started 51,686 projects, Odisha around 42,899 and Jharkhand 2,07,173 — the majority of which is for declaring villages open defecation free (ODF).
Mines minister Narendra Singh Tomar at a recent review meeting asked the state governments to ensure that around 60% of the funds should be used to improve the lives of people through drinking water supply, imparting skills to youth for jobs in the local industry and building new school and healthcare facilities. Following the direction, officials say, some districts such as Dhanbad, a highly polluted coal mining district in Jharkhand, has allocated 62.5% of its fund for clean drinking water.
But the overall expenditure is about 20% of the money collected and the work from the fund is yet to start in the six districts of Garhwa, Khunti, Simdega, Jamtara, Dumka and Sahebganj, admit Jharkhand government officials familiar with the matter.
Jharkhand’s mines director SI Minz said the funds are directly allocated to the districts and the deputy commissioners are accountable for the expenditure. “We in the headquarters only receive the figures related to fund allocations and expenditures besides some details regarding work outlays,” he added.
In Odisha’s Kendujhar, the entire education budget has been used for the construction of additional classrooms.
The state has also planned to build a medical college in Keonjhar and a flyover in Joda from the fund, but starting work on these projects is taking time. Just 11% of ~4,453 collected has been utilised till May this year.
Odisha’s chief secretary Aditya Prasad Padhi, who supervises the fund at the state level, said they expect the pace of the work to pick up as the detailed project report of most of the big-ticket projects under DMF have been cleared.
“Getting a source of water in rural pipe water supply project is tricky and takes up a lot of time,” he said.
Chhattisgarh has approved about 51,686 projects spread across sectors such as drinking water supply, environment preservation, pollution control, health and education, among others and 60% of ~2,746 crore generated has been used, which is a high among all states.
Two Chhattisgarh districts — Korba and Maoist-affected Dantewada — stand out as they have the highest rate (about 85%) of completing the projects in a short span of time. States mining secretary Subodh Singh said: “Our progress in using the DMF funds is best in the country and Chhattisgarh is a role model for many states.”
In election-bound Rajasthan, the government has not been able to utilise even 20% of the money collected.
According to mines department, only 120 crore of the ~594 crore has been used so far. A secretary in the department said work was slow in almost all the 33 districts as district officials have failed to hold regular meetings on fund utilisation.
According to a study done by the Centre for Science and Environment, the slow pace of fund utilisation was primarily because of least progress with respect to developing district management plans except for a few key mining districts in Chhattisgarh, Odisha, Jharkhand and Madhya Pradesh.
Chandra Bhushan, deputy director general of Centre for Science and Environment said: “The district mining fund has huge potential to benefit poor locals in the mining areas. But the money is being spent without much scientific and contemplative planning. The districts need to identify the priority areas and ensure that the projects are completed in a time-bound manner.”
The mines ministry official quoted above said that the states have assured that all the ongoing projects will be completed by the end of the current financial year, which is March 2019, a month before the general elections.
VOICES OF PROTEST
Rana Sengupta, managing trustee and CEO of the Rajasthan Mine Labour Protection Campaign Trust, said the government is only duplicating the fund spend.
“The different departments already had sufficient funds. The government is diverting funds for welfare of mining workers.”
He suggested that the government should set up a mine workers welfare board on the lines of the building and other construction workers’ board. “This will benefit not only the mine workers but also ensure their votes to the government,” he said.
According to Haru Rajwar, a resident of Lodna in Dhanbad, the administration chalked out several toilets under the ODF scheme, but “only a few are operational for want of water,” he said. The opposition Bharatiya Janata Party (BJP) in Odisha claimed that the money was being allocated to small projects to benefit the Biju Janata Dal (BJD) cadre, a charge denied by the ruling party. (With inputs from Debabrata Mohanty in Bhubaneswar, Ritesh Mishra in Raipur, Urvashi Dev Raval in Jaipur and Gautam Mazumdar in Ranchi)