Current Affairs

District Mineral Foundation-Issues

District Mineral Foundation-Issues

The District Mineral Foundation (DMF) is the feature of Mineral and Mines Development and Regulation act of 2015.


Opportunity- to improve economic status and empower communities


Challenge- to realize the opportunity, the institutional structure and the rules guiding the DMF must be devised

appropriately and should be implemented with proper planning, oversight and accountability

What the 2015 Act says?

Objective: “work for the interest and benefit of persons and areas affected by mining related operations”

  • Establish DMF by state governments in the mining districts.
  • DMF will be the nodal authority entrusted with the day-to-day matters of benefit-sharing.
  • New mine lease holders to pay not exceeding one-third of the royalty to DMF*. This is to be determined by the central government. How funds will be used will be decided by the states.
  • Objective and functioning of the DMF should be guided by Constitutional provisions relating to Fifth and Sixth Schedules for governing tribal areas.
  • It should also be guided by the provisions of the Panchayats (Extension to Scheduled Areas) Act (PESA), 1996, and the Forest Rights Act, 2006

*For existing mine lease holders: DMF amount to not exceed royalty.


  • larger issues of lawless mining, ecological damage and abuses borne by local communities remain buried under litigation and neglect.
  • The amended mining law now states that new lease-holders will contribute an amount “not exceeding a third of the royalty” to the DMF; existing lease holders will contribute an amount “not exceeding the royalty”. Effectively, the law specifies ceilings, but no floors.
  • While mining associations lobby the Centre on keeping their contributions to the DMF to a minimum, there is no similar platform for other stakeholders outside government to voice their concerns. In fact, there is absolutely no transparency or disclosure from the Centre on how it is carrying out the decision-making process on this crucial issue.
  • Similarly, the Odisha government’s August 18 DMF notification was neither preceded by any public consultation exercise, especially in ore-rich districts, nor was a draft version of the rules issued to incorporate public feedback and  review.
  • Worse, government officials dominate the DMF’s Board of Trustees, and constitute the entirety of its Executive Committee. Officials have the powers to prepare plans and budgets, sanction funds, award contracts, and if they deem appropriate, even use DMF funds for projects at the block and district level, thus bypassing remote Adivasi villages in the forests and mountains witnessing mining.
  • It is alarming how, despite local communities being the hardest hit by mining projects, the institutional framework created by these rules entirely sidelines public participation and local knowledge as elements crucial to building an effective DMF.

The only allowance the rules make is the provision of gram sabha approval for decisions of the DMF in scheduled areas. However, officials have prepared the ground for reducing this to a token by not detailing what the approval process will entail.

  • In this overly centralised structure, communities can neither plan nor authorise tasks, which they believe the DMF should undertake. They cannot even conduct social audits of projects carried out in their name — in fact, the only audit the notification specifies is an internal one.

The Way Ahead


  • DMF must be people centric, effective and accountable
  • Need to set clear guidelines for identifying beneficiaries
  • Specify how and where the money should be spent
  • Specify who should administer the funds
  • Ensure effectiveness, transparency and accountability of DMF


Where the Money Should be spent


  1. Benefit sharing- monitory benefit to directly affected people (including spent on widows, single mothers and old people without family support), no less than that under MGREGA.
  2. Securing livelihoods- education scholarships, health insurance, livelihood trainings, loans to establish small businesses, etc.
  3. Investing in the future- set aside to revive the economy of the area when mining finishes to avoid the issue of ‘ghost towns’.


Ironically, the Union Ministry of Mines’ own 2011 document on ‘Sustainable Mining’ conceptualised the DMFs as bodies with project-affected, community and civil society representation, and a more expansive public role. This included building the capacities of Adivasi co-operatives in line with the Samata judgement on mining in scheduled areas, providing affected communities with monitoring powers on existing mines, enabling informed participation in consent processes, and holding periodic district-level consultations on the impacts of mining, with the involvement of key policymakers like the MTA and the Ministry of Environment and Forests.

As the Shah Commission’s reports outlined, mineral-rich areas are afflicted by a severe asymmetry of power between local communities and the State-miner combine. Ongoing policies are widening this inequity, and reinforcing the harmful approach that Adivasi lands are, first and foremost, a site for resource extraction.


"District mining Foundation is noble in intention but problematic as far as its structure and local participation and autonomy is concerned" Critically Analyse.

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