DMF Funds Remain Focused on Infrastructure, with Only Three States Achieving Priority Sector Targets

Despite the well-meaning intentions behind the District Mineral Foundation (DMF) funds, a significant portion of these financial resources continues to be channeled primarily into infrastructure projects, leaving the intended priority sectors—such as health, education, and welfare—underfunded. New reports have highlighted that only three states have been able to meet the targets set for spending on these priority sectors, raising concerns about the efficacy of DMF allocations in addressing the core needs of communities affected by mining activities.

The DMF is a mechanism created under the Mines and Minerals (Development and Regulation) Act, 1957, aimed at utilizing funds generated from mining operations for the welfare and development of local communities. The funds are intended to focus on critical sectors such as health, education, employment, and welfare, which are often severely impacted by mining operations. However, there has been increasing evidence that infrastructure projects, while vital, have taken precedence in many states, pushing the priority sectors into the background.

A Shifting Focus on Infrastructure

According to the latest data from the Ministry of Mines, a substantial portion of the DMF funds—often upwards of 60 to 70 percent in several states—has been allocated to infrastructure development, including roads, bridges, and other physical structures. While these projects undoubtedly play a significant role in enhancing connectivity and facilitating economic growth in mining regions, they do not directly address the immediate welfare needs of the communities living in the shadow of mining activities.

In many of these areas, mining operations have led to environmental degradation, health problems, and displacement, making investments in healthcare, education, and livelihoods critical. Yet, due to the strong political and economic lobbying surrounding infrastructure projects, DMF allocations have often been diverted toward building physical infrastructure rather than improving the quality of life for the affected communities.

This shift in priorities has raised alarms among experts who argue that while infrastructure improvements can be important for long-term development, the primary objective of the DMF was to mitigate the adverse impacts of mining on local populations. Without a balanced focus on health, education, and employment generation, these regions may not see substantial improvements in their overall well-being.

The Challenge of Meeting Priority Sector Targets

Under the current guidelines, states are required to allocate a certain percentage of their DMF funds to priority sectors such as healthcare, education, skill development, and employment. However, many states have found it challenging to meet these targets. A recent review showed that only three states—Rajasthan, Jharkhand, and Madhya Pradesh—had managed to achieve the desired allocation levels for these priority sectors, signaling a stark contrast to the rest of the country.

In states like Odisha, Chhattisgarh, and Karnataka, where mining operations are particularly intense, the emphasis on infrastructure has overshadowed the essential welfare initiatives. The reason behind this shift can be attributed to the fact that infrastructure projects often have immediate, visible impacts, making them easier to justify to both local populations and political stakeholders. Additionally, infrastructure projects can be politically advantageous, with local governments able to showcase tangible results, such as improved road connectivity or better transport facilities, that are widely appreciated by voters.

In contrast, spending on healthcare or education improvements can take longer to yield visible outcomes, often requiring ongoing investment, training, and long-term commitment. This has led to a prioritization of short-term infrastructural gains over sustainable social development.

The Impact on Local Communities

The failure to adequately address the needs of local communities—especially in health, education, and welfare—has had serious consequences. In mining areas, environmental pollution and health hazards, such as respiratory issues, water contamination, and the spread of diseases, are widespread. Additionally, mining-induced displacement has led to the loss of livelihoods for many families. With a disproportionate amount of DMF funds directed toward infrastructure, these challenges have not been sufficiently addressed.

Local residents have raised concerns about the lack of healthcare facilities and educational opportunities, particularly for children and marginalized groups. In many cases, local schools remain under-resourced, while health clinics are understaffed and unable to cope with the rising number of patients. The diversion of DMF funds toward roads and bridges, though useful, has not alleviated the immediate problems faced by these communities.

Furthermore, employment generation and skill development programs—vital to providing alternative livelihoods to those displaced by mining activities—have often taken a backseat. Without these initiatives, many mining-affected areas remain economically dependent on the industry, making the communities vulnerable to economic shocks or fluctuations in global demand for minerals.

Moving Forward: A Call for Balanced Allocation

To ensure the success of the DMF, experts are calling for a more balanced and transparent approach to fund allocation. While infrastructure is undeniably important, there is an urgent need to prioritize the welfare of local communities. States must focus on meeting their targets for health, education, and employment generation, while also ensuring that the benefits of mining do not come at the expense of environmental sustainability or human well-being.

A comprehensive review of the DMF’s implementation, coupled with greater oversight and accountability, is necessary to ensure that the funds are being spent effectively. Local communities, civil society organizations, and stakeholders must be involved in the decision-making process to ensure that DMF funds are used to truly benefit those who have borne the brunt of the mining industry’s impact.

In conclusion, while infrastructure development remains crucial, it is equally important that the DMF funds are redirected toward meeting the pressing needs of communities affected by mining. If the fund is to fulfill its original purpose, a more holistic approach is required, one that ensures health, education, and economic opportunities are at the heart of its allocation.