A human touch to India’s mineral ecosystem

A human touch to India’s mineral ecosystem

 

Context:

The Modi government in the year 2015 had amended the Mines and Minerals (Development and Regulation) Act. The government had created a new body in the form of a District Mineral Foundation (DMF) where licensees and leaseholders pay the DMF a certain amount of the royalty

• The article – “A human touch to India’s mineral ecosystem”, focuses on DMF and its role in making sure that the communities affected by mining activities receive benefits from mining revenues.
• The article highlights the functioning of DMFs, its concerns, their advantages, and all possible solutions to improve their effectiveness.

 

Relevance:
GS-2 GS-3 (Government policies and interventions, Economy)

 

Dimensions of the Article

• What is a DMF and its Functions?
• Concerns
• Advantages of DMF

 

What is a DMF and its Functions?

• In accordance to Mines and Minerals (Development and Regulation) Act, 2015, DMF is a non-profit body established under the state governments of those districts that are affected by mining-related operations.
• Their primary function is to collect a percentage of revenue from mining companies, which is then used for the development and welfare of the local communities that have been impacted by the mining operations.
• The money collected is mostly used to fund projects related to social welfare programs like health care, education, environmental conservation, etc., The funds collected by DMFs come from two main sources:
  • For major minerals: Mining companies contribute up to 30% of the royalty they pay to the government.
  • For minor minerals: The contribution is up to 10% of the royalty.

 

Concerns

• Lack of Transparency and Accountability: The main concern is wrt how the funds are utilized. The chances of funds being misallocated or misused is more.
• Poor Planning and Execution: Most of the projects chosen do not address the actual needs of the affected community. Moreover, they lack proper implementation which leads to wastage of funds.
• Exclusion of Beneficiaries: Few projects have not considered most affected communities, particularly tribal groups and women. This increases the chances of these section missing out from the benefits directly.
• Administrative Issues: Lack of trained staff, inadequate monitoring systems and inefficiencies in project management has ,made the management of DMFs weak at the district level.

 

Advantages of DMF

• Focus on Local Communities: The concept of DMFs is to benefit the local communities  who bear the brunt of the environmental and social impacts of mining. The wealth generated from mining helps the affected local communities.
• Improving Basic Services: DMFs help improve essential services such as health care, education, clean water supply, and infrastructure in underdeveloped mining regions.
• Environmental Restoration: It also has a potential to support projects that reduces environmental damage caused by mining activities, such as afforestation, soil restoration, and efforts to control pollution.
• Contribution to Sustainable Development: By directing mining revenues into sustainable development projects, DMFs can help transform mining-affected areas into thriving communities.

 

Conclusion

DMFs play a crucial role in ensuring that the benefits of mining are shared with local communities. By focusing on rectifying the challenges, it will help the money reach those who need it the most and contribute to the  sustainable development of mining-affected regions.