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.
