‘District Mineral Foundation (DMF) proposing to use a part of mining cess for development of mining districts has a long way to go for achieving its objectives, says CSE’s status report.
In about two years’ since the District Mineral Foundation (DMF) came into existence, a total of about Rs 5,800 crore has been collected under DMF Trusts in various mining districts. However, the potential corpus is still higher, as in certain states such as Tamil Nadu and Uttar Pradesh, DMFs are yet to be roll out. Also in some big mining districts such as Yavatmal in Maharashtra, Guntur in Andhra Pradesh and Khammam, Adilabad and Karimnagar in Telangana, the collection so far has been much less than what was estimated, according to the ‘District Mineral Foundation (DMF): Status Report 2017’ prepared by a team lead by Chandra Bhushan of the Centre for Science and Environment (CSE), an environmental and sustainability think tank.
Besides fund inflows to DMF Trusts, two determining factors related to DMF implementation are the institutional arrangements of DMFs and planning and allocations for DMF funds. On both these fronts, the progress in most districts is still in the inception stages, according to the report released on July 31, 2018 in New Delhi.
The CSE report is an evaluation of the progress and performance of DMFs in India’s 50 key mining districts across 11 states. The reference period of the study is from institution of DMFs in 2015 till nearly the end of the previous financial year, February 2017.
The fund is clearly a boon for some of India’s poorest and most 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.
Many districts in these states, also identified as backward districts by the Planning Commission of India (currently, Niti Aayog) fare very poorly in terms of human development indicators such as nutrition and health, mortality rate, access to clean water, sanitation, education, etc. These three states alone account for close to 70 per cent of the total money deposited in DMFs so far. Coal mining districts such as Korba, Angul and Dhanbad have the most significant shares of DMF funds, followed by some of the major iron ore mining districts such as Kendujhar, West Singbhum and Dantewada.
The following are the edited excerpts of the report:
Institutional mechanism
In case of the institutional set-up, while most districts have identified the DMF body – members of the Governing Council and Managing Committees – the administration is dominated by government officials with poor representation of people. DMFs are functioning without a fixed administrative set-up, such as an office for planning and co-ordination, relying on intermittent meetings of the DMF body. However, the encouraging part is that some key mining districts and states do recognise the need for this, and are working on it; at the time of the report, 20 districts were in the process of doing this. Another important issue is ensuring accountability of the institution. For DMFs, this entails registration of the Trust under the appropriate law and authorities. But the approach towards this has been mixed so far, largely due to lack of clarity on the appropriate registration mechanism.
Poor planning
The least progress so far has happened with respect to developing DMF plans. Except for a few key mining districts in Chhattisgarh, Odisha, Jharkhand and Madhya Pradesh, planning has not happened in most. Some districts have identified certain areas to sanction specific works depending on the urgency to address the issue. In the absence of proper administrative set-up and resources at the district level for DMF planning, in states such as in Chhattisgarh and Jharkhand, the state governments have intervened issuing directions to the districts on planning and allocation. Odisha had, however, left it to the districts in the first year of planning. While the planning approaches and allocations vary, certain things could be captured from the evaluation of some key district DMF plans and budgets. Based on the completeness of information received on these accounts, CSE has analysed the allocations of nine districts. These include three districts of Chhattisgarh (Dantewada, Korba and Raigarh), two of Jharkhand (West Singhbhum and Dhanbad), three from Odisha (Kendujhar, Sundargarh and Jharsuguda) and one district of Madhya Pradesh (Singrauli). These being India’s top mining districts and spread across four key states, can be argued to be indicative of how DMF funds are being rolled out.
Ad hoc priorities
What comes out is that while most of the districts have made allocations for certain "high priority" issues as identified under the respective state DMF Rules, the allocations at various instances are ad hoc and short-sighted. In many districts, the DMF plans mechanically list the number and types of works to be undertaken, without any elaboration on the rationale of planning.
Among the issues that have been prioritised in the first year of allocations by a majority of the districts, drinking water is a common one. Education and health care are two other priority areas that districts have considered, though for all these allocations and approaches vary.
For example, Dhanbad, a highly polluted coal mining district in Jharkhand, has allocated 62.5 per cent of its DMF budget for clean drinking water, which the district largely plans to provide through piped water supply. On the contrary, Singrauli, the top coal mining district of Madhya Pradesh and a critically polluted area, has earmarked a negligible 0.9 per cent of its DMF budget for drinking water – the amount will be devoted entirely for digging tube-wells. Considering the high levels of groundwater contamination in mining areas and low water table in most parts, investing in tube-wells and hand-pumps will do little to ensure clean water supply. The focus rather should be on sustainable water supply measures from surface water and other natural sources, through proper assessment and planning.
In the first year of planning, the districts are also inclined to allocate significant parts of the sectoral allocation for various construction purposes. For instance, on the education front, with few exceptions, a big focus is on construction of school buildings, auditoriums, classrooms etc with very little focus on providing supporting resources that can improve access and quality of education. For example, Kendujhar’s entire education budget is for construction of additional classrooms. Similarly, for women and child welfare, the focus is primarily on construction of Anganwadi Centres, with little or no simultaneous investment in primary healthcare, which is crucial to improve health and nutrition status of children and women. In fact in most districts, investments towards improving primary healthcare remain very low, though this is a pressing problem in all rural mining areas.
Administrative shortfalls
There are shortfalls on various fronts – from institutional and administrative issues to planning and budgetary allocations – which the districts need to act on. As an administrative priority, it must be ensured that the DMF Trust is registered, an office for planning and co-ordination is setup for each DMF, and all information related to DMF for every district is put out in the public domain. Another very crucial aspect is to undertake scientific and comprehensive planning for every DMF. Planning and budget allocation should prioritise issues for intervention through proper assessment of the relevant socio-economic, human development and environmental parameters of the district(s), particularly the mining affected areas, and capture the needs and aspirations of the people by engaging them in the planning process. A perspective planning approach must be adopted to address immediate needs, secure long-term sustainable investments, and ensure future security.
With a huge non-lapsable and untied resource envelop, clear objective guiding its implementation, targeted beneficiaries and focussed intervention areas, DMFs hold the promise of addressing years of deprivation and inequality afflicting people living in India’s mining areas. The government has 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 will operate in the coming years.
Recommendations
The review of 50 key mining districts across various states shows that there is a long way to go. There are gaps in various fronts, including institutional and administrative issues, DMF planning and fund allocation, and people’s engagement in the decision-making process. As DMF enters its third year, it is an important point in time to understand the course and progress of implementation, so that necessary measures can be adopted to make it effective for serving the best interests of mining-affected people and regions. Following is a set of recommendations on each of these aspects:
On institutional arrangement
Administrative set-up:
All DMFs must set up an office for purposes of coordination, planning, monitoring, accounting etc. The office can be located in the office of the District Panchayat as indicated in the model DMF Trust deed of the Union ministry of mines (Section 2 of Model Trust Deed). According to state DMF Rules, up to 5 per cent of the DMF budget can be used towards administrative expenses.
The district administration should hire full-time staff for the office with expertise on issues.
On Registration of DMF Trusts
The DMF Trust has been created by a statute – the Mines and Minerals Development and Regulation Amendment Act (MMDR), 2015. It has a defined group of beneficiaries and resource envelop to deliver services, and is empowered to operate bank accounts etc. Therefore, it is important that DMF Trusts are registered. Registration will make the Trust a legal entity, ensure financial accountability and transparency of operations.
To bring in clarity to registration, these simple guidelines may be followed:
If there is a state-specific Act for public trusts (as in certain states such as Maharashtra or Rajasthan), the Trust can be registered under that.
In cases where a state does not have an exclusive Act for public trusts, the Indian Trust Act would be applicable (despite the fact that the Indian Trust Act is geared to provide for private trusts).
On planning and allocation
There are two crucial aspects that DMFs in various mining districts must consider while developing plans and allocating funds:
Determine focus areas of intervention and prioritise issues through scientific assessment and taking into account the views of mining-affected communities.
Undertake a process of comprehensive planning to address immediate as well as long term needs, invest in sustainable assets, and provide security for the future.
Focus areas of intervention
The key areas of intervention that DMFs should focus on can be broadly categorized under the following heads:
Invest in human capital and provide supporting infrastructure and resources.
Nutrition and food security: Improvement of nutrition status and food security can be ensured
Healthcare: Support for and access to better healthcare can be ensured:
Providing health insurance to people in affected areas.
Education: The quality of primary and secondary education can be improved
Clean water: Supply of clean water for health and hygiene can be ensured
Improve livelihood opportunities and make people employable.
Livelihood and employment opportunities can be improved by developing and incentivising livelihood opportunities around local resources and those relevant to the knowledge and skills of the local people.
Invest in and secure the future.
A part of the DMF money should be kept aside to ensure future security after mining activity is completed.
With DMF’s coming into effect, the right of the people to benefit from natural resources has been recognised for the first time.
The fund is a boon for some of India’s poorest and most underdeveloped districts, many of which are in the country’s top mining states.
A boon for development of mining districts
Instituted in March 2015 under India’s Central mining law, the Mines and Minerals (Development and Regulation) Act (1957), District Mineral Foundation (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. 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". It 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 to implement various developmental projects and welfare programmes in mining-affected areas with DMF funds, alleviate the adverse impacts of mining on people and environment, and create long-term sustainable livelihood opportunities for mining-affected people.
With DMFs coming into effect, the right of the people to benefit from natural resources has been recognised for the first time. DMF, thus, is a vehicle for sharing mining benefits with communities who have only been burdened by such activities. Miners and mining companies are required to pay a sum – determined on the basis of their royalty payments – to the DMF Trust of the district where the mine is located. Provisions of the DMF law is also to be implemented taking into consideration the provisions of important laws ensuring people’s rights – the Panchayats (Extension to Scheduled Areas) Act (PESA), 1996, the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (the FRA); and constitutional provisions related to the Fifth and Sixth Schedules for governing tribal areas.
While most of the districts have made allocations for certain "high priority" issues, the allocations in various cases are ad hoc and short-sighted.
For full report follow the link: https://www.cseindia.org/people-first-district-mineral-foundation-dmf-8893
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