Bhubaneswar: The Comptroller and Auditor General (CAG) has flagged significant systemic deficiencies in the assessment, collection and monitoring of District Mineral Foundation (DMF) contributions in Odisha, saying the problems have led to large shortfalls and misallocation of funds intended for mining‑affected communities.
Audit finds errors in contribution calculations and interest losses
The audit, presented in the Odisha Assembly on Monday, examined six districts — Sundergarh, Keonjhar, Jajpur, Mayurbhanj, Dhenkanal and Nabarangpur — and reported that incorrect application of prescribed DMF contribution rates, failure to reassess contributions after final royalty assessments and non‑levy of interest on delayed payments resulted in substantial losses to DMF collections.
According to the report, while the six districts together collected ₹22,568.17 crore towards DMF contributions (including interest) and sanctioned 17,435 projects worth ₹20,947.52 crore during 2015‑16 to 2023‑24, none of the audited DMFs had prepared a perspective plan or master plan for fund utilisation.
Funds not reaching directly affected villages
The CAG highlighted a stark mismatch between intent and implementation. In Keonjhar and Sundergarh alone, 9,739 projects worth ₹17,926.79 crore were sanctioned during 2015‑16 to 2023‑24. Of the sanctioned projects, expenditure of ₹983.32 crore went towards projects in 976 non‑affected villages, while not a single project was implemented in 488 directly affected villages and 96 indirectly affected villages.
In Jajpur DMF, of the ₹1,164.43 crore utilised, 43.54% (₹507.02 crore) was spent in indirectly affected areas — exceeding the prescribed cap of 40% for such areas, the audit said.
Interest earnings and financial safeguards missing
The CAG further found that DMFs in Mayurbhanj, Dhenkanal and Nabarangpur had not opted for a flexi deposit/auto‑sweep arrangement for surplus DMF funds during 2015‑16 to 2023‑24. This omission resulted in an estimated interest loss of ₹9.49 crore. The audit also pointed to other financial control lapses that reduced potential DMF receipts from contributing leaseholders.
| Audit focus (2015‑16 to 2023‑24) | Figure |
|---|---|
| Total DMF collections (six districts, incl. interest) | ₹22,568.17 crore |
| Projects sanctioned (six districts) | 17,435 projects worth ₹20,947.52 crore |
| Keonjhar & Sundergarh: projects sanctioned | 9,739 projects worth ₹17,926.79 crore |
| Expenditure in non‑affected villages (Keonjhar & Sundergarh) | ₹983.32 crore |
| Jajpur: utilisation exceeding cap in indirectly affected areas | 43.54% (₹507.02 crore of ₹1,164.43 crore) |
| Interest loss due to non‑flexi deposits | ₹9.49 crore |
Implications for affected communities and governance
The CAG’s findings raise immediate questions about whether funds raised for the welfare and development of mining‑affected populations have been targeted and monitored effectively. The lack of perspective plans and master plans for DMF utilisation points to weak strategic planning, the audit said, reducing transparency about how projects were selected and how the needs of affected villages were prioritised.
Administration and oversight lapses identified by the audit include:
- Incorrect application of DMF contribution rates by leaseholders or assessing authorities;
- Failure to reassess contributions following final royalty adjustments, leading to under‑collection;
- Non‑levy or delayed levy of interest on late contributions;
- Absence of investment safeguards (flexi deposit/auto‑sweep), causing avoidable interest loss.
What this means for residents and next steps
For residents of mining‑affected areas, the audit signals that projects meant to address local damage, livelihood loss and community development may not be reaching the most impacted villages. The report implies a need for immediate corrective steps: ensuring strict application of contribution rules, revisiting sanctioned projects to confirm they benefit affected villages, preparing perspective and master plans, and placing surplus funds in secure sweep‑deposit arrangements to maximise interest earnings.
State authorities will face scrutiny in the Assembly and from civil society groups for remedial action. Officials will need to reconcile sanctioned projects with ground priorities, account for funds spent outside affected hamlets, and strengthen financial controls to prevent future revenue leakage.
Members of the public seeking redress or information on DMF projects in their area may approach their district DMF offices for project lists and utilisation certificates. Strengthening local monitoring — including gram sabhas and panchayats in the planning process — can improve accountability and ensure DMF resources reach the communities they were created to serve.
With large sums already collected and sanctioned, the state’s immediate challenge is governance: ensuring DMF funds are assessed correctly, invested prudently and directed to the villages that bear the brunt of mining activity.
