A Missed Opportunity

The District Mineral Foundation (DMF) was conceived as a transformative institution to ensure those who bear the brunt of mining activities also share its benefits.

- CHANDRA BHUSHAN

Set up in March 2015 under the Mines and Minerals (Development and Regulation) Act, the DMF is designed to channel mining revenues to improve the lives and livelihoods of affected communities. However, a detailed assessment of 23 states and key DMF districts by me and my colleagues paints a concerning picture.

While DMFs have collected over ₹1.03 lakh crore, only about 40% has been utilized. Worse, much of this spending has been directed towards capital-intensive projects—roads, bridges, buildings, parking lots, and water pipelines—that should ideally be funded by state and central government budgets. The projects that matter most to mining-affected communities—livelihoods, skills, education, health, and support for small businesses—have received minimal investments.

With India's continued economic growth and increasing mineral demand for the energy transition and net-zero goals, this fund will continue to expand. Our projections indicate ₹2.5-3 lakh crore could be collected over the next 10 years. If this money is utilized prudently, it can transform the lives of millions of India's poorest people. We must therefore ask: Will the DMF be yet another noble initiative that failed to deliver, or will it evolve into a truly participatory and people-centric institution?

Intent vs reality

DMFs came into being after decade-long discussions on the issue of "resource curse." The fact that India's richest mining districts are inhabited by some of its poorest people prompted the government to set up the DMF as a non-profit trust. Mining firms are required to contribute an amount equal to 10-30% of the royalty to DMFs for investments to improve the lives of affected people. In September 2015, the government launched the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) to guide DMFs on planning, prioritizing, and utilizing the funds.