Indirectly mining affected people in Odisha get substantial DMF fund, CAG unearths

The Comptroller and Auditor General of India has unearthed major irregularities in the utilisation of District Mineral Foundation (DMF) funds, meant to benefit people and areas affected by mining operations, with funds being spent without adherence to rules and to accommodate ineligible utilisation.

According to the CAG report on the performance audit of ‘Implementation of Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) including functioning of District Mineral Foundations in Odisha for the year ended March 2024′ tabled in the Odisha Legislative Assembly on Monday, the identification of directly and indirectly affected people was delayed in mineral-bearing districts.

As per Rule 10(D) of the Odisha DMF Rules, 2015, not more than 40% of the funds may be utilised for taking up activities in the indirectly affected areas.

The audit notes this in the DMFs of Keonjhar and Sundargarh. However, the utilised amount was below the threshold limit of 40% in indirectly affected areas; 30.67% and 22.67% of the sanctioned amount, respectively, were shown to have been spent under a new category called “Common affected areas”, which was not defined in the Odisha DMF Rules or in the PMKKKY guidelines.

“Amount utilised for indirectly affected areas has increased beyond the stipulated limit to 45.68% in DMF, Keonjhar and 41.10% in DMF Sundargarh,” the CAG finds.

Similarly, in DMF, Jajpur, 19.86% was spent under “Common affected areas”. “This indicated that the creation of the new category was only to accommodate ineligible utilisation within the prescribed limits,” says the CAG.

It further said, “Scrutiny of records revealed that DMF funds amounting to Rs. 4,541.66 crore were sanctioned for execution of 1,114 projects in common affected areas in the case of three DMFs (Jajpur, Keonjhar and Sundargarh). Of this, funds amounting to Rs. 2,578.73 crore were utilised without any rule provision. This indicated that the DMFs failed to limit and prioritise expenditure between identified directly and indirectly affected areas as prescribed in the applicable rules,” it finds.

“Under Rule 11(1) and 11(3) of ODMF Rules, DMF of each district had to identify, prepare and maintain a list of affected people. This was to be done to ensure long term sustainable livelihood projects for affected people due to mining activities. During the period 2015-24, only one (Jajpur) out of the six test-checked DMFs had identified the affected people while others had not identified people affected either directly or indirectly by the mining operations,” the CAG finds.

“Thus, due to non-identification of affected people, rehabilitation and resettlement of such people could not be ensured by the DMFs and uploaded on the website for information to the public,” it said.

“In DMF, Jajpur, an amount of Rs. 1,164.43 crore was utilised, out of which Rs. 507.02 crore (43.54%) was utilised in indirectly affected areas which exceeded the prescribed limit of 40% in deviation to Odisha DMF Rules without any justification. Further, as against the prescribed provision of 60% of total utilisation of Rs. 1,164.43 crore, an amount of only Rs. 426.11 crore (36.60%) was utilised for implementation of projects in directly affected areas,” CAG pointed out.

The DMF finds implementation of projects which did not confirm with the rules of DMF rules were done.