DH Exclusive: Karnataka lags in mineral fund use

Deccan Herald | Mahesh Kulkarni, DHNS, Bengaluru, OCT 06 2019

Karnataka lags among other mineral-bearing states in the implementation of socio-economic development and welfare projects in the mining-affected districts, for which Rs 1,652 crore funds have been collected under the District Mineral Fund (DMF).

The state government has spent just 9.5% of the funds so far at Rs 157 crore out of a total of Rs 1,652 crore collected from mining companies in the last three years.
“The political instability and frequent change in the district in-charge ministers who head the district level DMF Trusts, has resulted in a tardy implementation of various welfare schemes,” a Federation Indian of Mineral Industries (FIMI) told DH.

Among other major mining states, Chhattisgarh and Jharkhand have spent as high as 66% (Rs 2,900 crore out of Rs 4,379 crore) and 43% (Rs 1,790 crore out of Rs 4,211 crore) of the funds collected by them respectively. Rajasthan and Odisha stand in the third and fourth positions with 24.3% (Rs 620 crore out of Rs 2,547 crore) and 22% (Rs 1,771 crore out of Rs 8,000 crore) of the funds spent so far.

Fund allocation

On an all-India basis, an estimated Rs 31,000 crore has been collected from miners under the DMF up to July this year.

In Karnataka, of the Rs 1,652 crore collected so far, Ballari district accounts for the majority of Rs 988 crore, followed by Kalaburagi at Rs 252 crore and Rs 117 crore by Chitradurga. The state has identified 1,887 projects for which Rs 1,493 crore has been allocated.

The Karnataka government has identified several socio-economic development projects that include drinking water supply, environment prevention and pollution control measures, health care, education, welfare of women and children including on their nutrition, welfare of aged and disabled persons, skill development, sanitation, physical infrastructure, irrigation, energy & watershed development and measures for enhancing environment quality in mining districts.

In Karnataka, the DMF was notified on January 11, 2016, for major minerals and August 12, 2016 for minor minerals as per the provisions of the MMDR (Amendment) Act, 2015.

The DMF has been set up in all 30 districts in the state. “Funds collected under DMF are important from the point of view of development near the mining areas and towards a change of perception of miners. Currently, miners are paying all taxes, spending 2% of net profit on CSR, contribution in DMF and NMET. If the funds collected under DMF are not spent in the spirit they were collected, it puts extra pressure on mining companies. Communities start believing that miners are not taking care of them,” R K Sharma, Secretary-General, FIMI said.

He also appealed to the government to ensure that development through DMF funds takes place expeditiously and more so in consultation with mining companies.

The District Mineral Foundation Trust is headed by the district in-charge minister with MLAs and MLCs of the district, president of Zilla Panchayat, and deputy commissioner among others as members.

The state-level steering committee is headed by the chief minister with chairpersons of respective district mineral foundation trusts and chief secretary of the state as members. It is supposed to meet once a year.

The Karnataka District Mineral Foundation Rules, 2016 states that the object of the Fund shall be to work for the interest and benefit of persons and areas affected by mining-related operation, to implement various developmental and welfare projects and programmes in mining-affected areas, to minimise or mitigate the adverse impacts, during and after mining, on the environment, health and socio-economic of people in mining districts.

“Nothing is moving in Karnataka as far as implementation of projects under DMF. In Odisha, the state government has roped in an international consultancy firm Ernst & Young to advise and implement the projects. The Karnataka government has taken our suggestions on this,” a FIMI official added.