Program Management Unit to Improve Efficiency of DMF

Syllabus: GS2/ Governance, GS3/ Economy

In Context

• The Ministry of Mines announced the setting up of a Program Management Unit (PMU) to improve the efficiency of the District Mineral Foundation (DMF) and ensure smooth implementation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).
  • PMU will facilitate coordination between Centre, States, and DMF districts.

What is District Mineral Foundation (DMF)?

• Legal Provision: Constituted under Section 9B of the Mines and Minerals (Development and Regulation) (MMDR) Act 1957 (amended in 2015).
• Nature: A non-profit trust set up in mining-affected districts.
• Objective: To work for the interest and benefit of persons and areas affected by mining-related activities.
• Status: DMFs have been established in 645 districts across 23 States.
• Funding: Contribution by Mining Lease Holders:
  • 30% of royalty for leases granted after 2015.
  • Funds are deposited at the district level and not transferred to the Consolidated Fund of India.
  • The amount collected is meant for area-based development, not for general infrastructure.

Fund Utilization Guidelines (via PMKKKY)

• About: The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) was launched in 2015 and revised in 2024 to guide the use of DMF funds for Aspirational Districts and Blocks Programme.
• Purpose: To minimize the negative impacts of mining and provide sustainable livelihoods to affected people.
• Fund Allocation: 70% of funds must be used for high-priority sectors like drinking water, healthcare, education, women & children welfare.
  • 30% of funds may be used for supporting infrastructure like roads, bridges, and electricity.

Significance of DMF-PMKKKY Model

• Strategic Fund Utilization: It ensures mining funds (DMF) are used in a planned way for local development based on PMKKKY guidelines.
• Community Welfare Focus: It prioritizes improving the lives and well-being of communities affected by mining activities.
• Enhanced Governance: It promotes transparency and accountability in how mining revenues are managed and spent locally.
• Sustainable Development Aim: It encourages a balance between mining and long-term socio-economic and environmental well-being.
• Grassroot Governance: Provides a template for community-led planning and bottom-up governance.

Concerns 

• Unspent Funds: A significant share of collected funds remains unused due to weak administrative capacity and poor project execution.
• Misallocation: Funds are often spent on general infrastructure projects (like roads and administrative buildings) instead of core welfare areas.
• Governance Issues: DMFs often function under the district collector’s control, with minimal involvement of local communities.
• Poor Planning: No structured Annual Action Plans.

Way Forward

• Empower Gram Sabhas and local communities in decision-making.
• Enforce third-party audits and social audits for transparency.
• Build capacity of district-level institutions for better fund utilization.
• Mandate Annual Development Plans based on local needs and baseline data.

Source: ET