Odisha’s Keonjhar district, known for its abundant mineral reserves, particularly iron ore, has been identified as the top beneficiary of the District Mineral Foundation (DMF) scheme. Over the past seven years, the district has spent a whopping ₹3,000 crore under this initiative. Annually, around 50 million tonnes of the district’s 2,555 million tonnes of iron ore are extracted, significantly contributing to Odisha’s economy.
Understanding the District Mineral Foundation Scheme
The DMF scheme was established by the Mine and Minerals Development Regulation (Amendment) Act, 2015. It mandates the creation of a non-profit trust in every district impacted by mining activities. These trusts receive funding through a portion of a royalty paid by every mining lease, capped at one-third of the total royalty, as determined by the Central Government.
These funds are spent on improving the welfare of those living in mining-affected regions. In Keonjhar, the total collection from the DMF fund has skyrocketed to ₹8,840 crore, the most substantial amount accumulated by any district in India.
The primary aim of this contribution is to ensure that local communities affected by mining, who are often tribal and among the poorest in the country, can also benefit from the natural resources extracted from their surroundings.
The functioning and fund usage of the DMF trusts are commandeered by the state’s DMF Rules, which overlap with the central directive, Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).
The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) Explained
This scheme, launched by the Ministry of Mines, utilises funds accumulated under the District Mineral Foundation (DMF). The primary goals of this initiative are:
1. Develop and implement various welfare projects/programs in mining-affected areas to supplement ongoing schemes/projects at the State and Central Government level.
2. Minimize/mitigate adverse impacts during and post-mining on environment, health, and socio-economics of people living in mining districts.
3. Ensure long-term sustainable livelihoods for affected individuals in mining zones.
At least 60% of the fund will be used for “High Priority Areas” such as drinking water supply, environmental preservation, pollution control measure, healthcare, education, etc. The remainder will be utilised for “Other Priority Areas”, covering physical infrastructure, irrigation, energy, watershed development, and measures to enhance environmental quality.
Assessing Knowledge Through Civil Services Examination
A question related to the purpose of ‘District Mineral Foundations’ in India was asked in the UPSC Civil Services Examination in 2016. The multi-part question sought to test participants’ understanding of the DMF, including its role in promoting mineral exploration activities, protecting the interests of affected persons, and the authority of state governments to issue licenses for mineral exploration. The correct response was that the DMF’s purpose is to protect the interests of the persons affected by mining operations.