Key Terms & Concepts — UPSC Mains
District Mineral Foundation
"A trust funded by mining royalties to benefit communities in mineral-rich districts affected by mining operations"
The District Mineral Foundation (DMF) is a statutory trust established under Section 9B of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDR Act). Mining leaseholders contribute a percentage of royalty to the DMF, which must use the funds for the benefit of communities affected by mining — particularly in areas of health, education, drinking water, environment, sanitation, and skill development. It is a mechanism to address the 'resource curse' in mining districts.
Important for GS2 (governance, welfare) and GS3 (mining, economy). Tests understanding of resource governance, tribal welfare, and decentralised fund management.
- 1 Established under MMDR Amendment Act, 2015 (Section 9B)
- 2 Contribution — 30% of royalty for pre-2015 leases, 10% for post-2015 leases
- 3 Total DMF collection — over Rs 75,000 crore since inception (2015-2025)
- 4 Governed by Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) guidelines
- 5 PMKKKY mandates — 60% on high-priority areas (drinking water, health, education, welfare of women and children, skill development, sanitation, environment)
- 6 40% on other priority areas (physical infrastructure, irrigation, energy, watershed development)
- 7 Key mining states — Odisha, Jharkhand, Chhattisgarh, Rajasthan, Karnataka
- 8 Criticism — low utilisation rates (only 50-60% of collected funds actually spent), lack of community participation, mismanagement
- 9 Resource curse — mineral-rich districts often have worst HDI indicators
Despite collecting over Rs 75,000 crore, DMFs have been criticised for low utilisation rates — Odisha and Jharkhand, which collect the most, have spent barely 50-60% of their DMF funds on community welfare.