Where did funds for mining areas go in Odisha? DM residence, stadium, school events

The District Mineral Foundation is a fund created in every Odisha district after a 2015 amendment to the Mines and Minerals Act. Mining leaseholders contribute money to it. The fund exists because mining can affect nearby communities and local infrastructure. Its central purpose is to support people and places affected by mining operations.

DMF money is supposed to finance welfare-related projects under the Pradhan Mantri Khanij Kshetra Kalyan Yojana, or PMKKKY. The article says Odisha’s districts received contributions from mining companies and sanctioned projects using that money. The spending should therefore remain connected to mining-affected areas and their needs.

This purpose matters because the CAG found money being used for unrelated activities. Examples included a collector’s reading room, police vehicles, and an international hockey stadium. Such spending can reduce funds available for the communities the DMF was created to help and weaken accountability for mining revenue.

Odisha’s 30 districts received Rs 26,602 crore in District Mineral Foundation contributions from mining leaseholders between 2015-16 and 2023-24. This is the total amount recorded in official data cited by the CAG report. It shows the enormous scale of the fund created to support mining-affected communities.

Of that contribution, Rs 25,969.87 crore was sanctioned for implementing projects. Sanctioning means authorities approved the money for planned works or activities. The funds were intended to be spent according to the PMKKKY guidelines, which connect DMF spending to welfare in mining-affected areas.

The size of the fund makes oversight especially important. The CAG found irregular uses in several districts, including spending on vehicles, offices, Covid-related payments, and a hockey stadium. Even a small diversion can matter, but large projects can significantly change whether affected communities receive the intended benefits.

The CAG identified spending that did not clearly serve mining-affected people or fit permitted administrative and welfare purposes. The examples were unusually broad. They included renovating a municipality office, renovating a reading room at the collector’s residence, organising school functions, and paying inauguration charges.

Other flagged spending included police patrolling vehicles and a vehicle procured in Jajpur. Sundargarh also released Rs 4.63 crore for 25 patrolling vehicles, while Rs 2.65 crore went to Covid incentives for medical staff instead of the chief minister’s relief fund. The report also questioned PPE supplies for private and public-sector mine workers and other plantation-related charges.

The biggest example was Rs 136.77 crore for Rourkela’s international hockey stadium. The CAG said such a stadium was not a PMKKKY activity and had limited or no direct use for people affected by mining. These findings suggest weak controls over DMF spending.

The CAG objected because DMF money is reserved for welfare in areas and communities affected by mining. Rourkela’s international hockey stadium was built for major national and international matches. The report said it offered limited or no direct benefit to people directly or indirectly affected by mining in Sundargarh.

Sundargarh’s DMF sanctioned Rs 136.77 crore for the stadium. The CAG said constructing an international hockey stadium did not come under any PMKKKY activity. The key issue was not simply that the project was public or expensive. It was that the project lacked the required connection to mining-related welfare.

The audit therefore called the spending irregular and said it defeated the fund’s purpose. The finding highlights why spending rules matter. If DMF money supports prestige infrastructure instead of affected communities, less money remains for health, livelihoods, basic services, and other needs tied to mining impacts.

When DMF money is spent on projects that do not directly help mining-affected communities, those communities may receive fewer benefits from a fund created specifically for them. Mining areas can need support for health, livelihoods, local services, and infrastructure. Unrelated spending competes with those priorities.

The article gives several examples. Sundargarh used DMF money for a collector’s reading room, police patrolling vehicles, school functions, and a hockey stadium. The CAG also found Rs 2.65 crore paid as Covid incentives to medical staff from DMF, although the report said it should have come from the chief minister’s relief fund. These choices can redirect limited attention and money away from affected residents.

The immediate consequence is reduced welfare delivery. The broader consequence is weaker accountability and public trust. The CAG’s findings may push authorities to review projects, recover irregular amounts where appropriate, and enforce clearer links between spending and mining-related needs.

Mining leaseholders are the source of DMF contributions. In Odisha, the 30 district foundations receive that money, while district authorities approve projects and arrange their implementation. The article does not identify one single official as the spending authority for every project, but it records spending by district-level authorities in places such as Sundargarh and Jajpur.

The PMKKKY guidelines provide the framework for using DMF money. They require spending to support welfare in mining-affected areas. Authorities therefore need to select projects, release funds, and document expenses in line with those rules. The CAG examines whether this process and the resulting expenditure are proper.

In this case, the CAG’s performance audit covered 2015-16 to 2023-24 and was tabled in the Odisha Assembly. It identified irregular spending, including the stadium and vehicles. The audit does not itself manage the fund; it exposes problems and gives legislators and authorities a basis for corrective action.

Mining operations can place special pressures on nearby communities. They may disturb land and water, affect livelihoods, increase demand for local services, and create health or environmental concerns. The article does not list every impact, but it explains the central reason for DMF: mining-related operations affect areas and people, creating a need for targeted welfare support.

Mining leaseholders are expected to contribute to the District Mineral Foundation. District DMFs then use the money for projects guided by the Pradhan Mantri Khanij Kshetra Kalyan Yojana. The mechanism links a portion of mining revenue to welfare in places affected by extraction, rather than treating the money as unrestricted public revenue.

That link is important. The CAG said spending on Rourkela’s international hockey stadium had little or no direct use for affected people and therefore defeated the fund’s purpose. Strong project selection and auditing are needed to ensure contributions reach communities facing mining-related effects.