Context

In 2014, the higher judiciary scrutinized the allocation of coal blocks, prompted by the Comptroller and Auditor General of India’s 2012 report on coal block allocations between 2004 and 2009. In response, the Narendra Modi government amended the Mines and Minerals (Development and Regulation) Act in 2015 to mandate auctions for these resources. The amendment also established the District Mineral Foundation (DMF), a new body where licensees and leaseholders are required to contribute a portion of the royalty payments. This initiative reflected the Prime Minister’s strong belief that local communities are crucial stakeholders in the development driven by the nation’s natural resources.

Overview

• As of 2021, India is the 4th largest producer of iron ore globally and the 2nd largest producer of coal in the world.
• India's combined aluminium production (both primary and secondary) reached 4.1 million tonnes per year in FY21, making it the 2nd largest aluminium producer worldwide.

A Decade of Transformation

• Achievement: Ten years later, the District Mineral Foundation (DMF) has accumulated nearly RS1 lakh crore, funding community-focused development projects in mining-affected districts. The shift from significant financial losses to amassing an almost RS1 lakh crore corpus for the DMF is a remarkable transformation.
• Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) scheme: September 16 marks District Mineral Foundation Day, celebrating the tenth anniversary of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) scheme. Over this decade, DMFs have facilitated the sanctioning of three lakh projects across 645 districts in 23 states, turning mineral wealth into a crucial resource for development in mining regions.
  • The PMKKKY aims to execute developmental and welfare initiatives in mining-affected areas, complementing existing state and central government programs.
  • Its goal is to mitigate the impacts of mining on local communities and ensure that those affected benefit from sustainable, long-term livelihoods.
• Women empowerment: At a recent launch event for the DMF Gallery in New Delhi, there was some remarkable women from self-help groups established by DMFs in Odisha. These women were not only skilled artisans but also emerging entrepreneurs. In Katni, Madhya Pradesh, DMFs are supporting young individuals in mastering drone technology, with many securing jobs and others preparing for new prospects.
• National Critical Minerals Mission: In India’s rapidly evolving mining sector, with the recent launch of the National Critical Minerals Mission to secure strategic and critical minerals and the expansion of our global presence through Khanij Bidesh India Ltd. (KABIL), DMFs play a crucial role in supporting local communities in mining areas. By involving State governments as active partners, DMFs embody the philosophy of ‘Sabka Saath Sabka Vikas Sabka Vishwas Sabka Prayas’.
  • Under the leadership of District Collectors, funds are directed to where they are most needed. The ‘National DMF Portal’ digitizes the management and oversight of DMFs across India, enhancing transparency and efficiency.
  • DMFs not only align with national priorities but also support district administrations in improving socio-economic and human development indicators in their regions.

Innovation across DMFs

• Flexibility: It is noteworthy how each DMF is adopting innovative approaches to maximize the impact of their initiatives and tackle unique challenges. For example, some DMFs are promoting inclusivity by incorporating elected representatives into their governing bodies, while others include non-elected members of gram sabhas.
  • Some DMFs have established dedicated engineering departments and assigned personnel from the State Public Works Department to ensure efficient project implementation. To ensure a strategic approach, DMFs are also developing three-year plans to achieve targeted goals.
  • Our current focus is to standardize these best practices across all DMFs, while preserving the local context and expertise within each district. These efforts aim to facilitate long-term, well-planned projects, moving away from the previously fragmented approach.
• To further enhance DMF operations:
  • We are encouraging district administrations to align DMF activities and objectives with existing central and state schemes in aspirational districts, thereby supporting the achievement of Sustainable Development Goals. We also aim to leverage DMFs to improve the livelihoods of forest dwellers by initiating projects related to the cultivation, collection, and processing of medicinal herbs.
  • DMFs will focus on identifying and nurturing rural athletes while developing sports infrastructure and facilities. Essentially, DMFs serve as microcosms of the government’s ‘whole of government’ approach and will continue to play a crucial role in reaching out to impacted communities.

Benefits of Convergence

• Exemplify cooperative federalism: DMFs exemplify cooperative federalism and uniquely integrate central and state schemes. By aligning goals and resources across three levels of governance, DMFs ensure that national priorities address local needs, thereby enhancing their impact and reach.
• Inclusive governance: Adopting a ‘whole of government’ approach, DMFs are emerging as powerful instruments for truly inclusive governance, extending their benefits to every part of the country.
• Inclusive development: By harnessing India’s mineral wealth, these initiatives are transforming historically underserved regions, converting natural resources into catalysts for local development. In doing so, India is not only empowering marginalized communities but also redefining global perspectives on resource management, demonstrating how nations can balance economic growth with social welfare and rights.

Conclusion

India's mineral system has evolved into a robust framework for sustainable and inclusive development. By leveraging initiatives like the District Mineral Foundation (DMF) and the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), India effectively integrates national priorities with local needs, transforming mineral wealth into a powerful driver of socio-economic progress. As the country advances its mineral strategy and global presence, it sets a global example of balancing resource management with social and economic development.

Source: The Hindu