KOLKATA (miningweekly.com) - Funds created through the taxation of mining, to mitigate the social and environmental impact of extraction, are grossly under-utilised across Indian states, a Parliamentary report has found.

Funds under the District Mineral Fund (DMF) in every district that has mining operations have been so grossly under-utilised that a Parliamentary committee on mining has questioned the entire operation of the fund, including identification of projects, accountability and transparency in deployment of the money, audit of the funds collected and timelines set for implementation of social projects.

The Parliamentary committee expressing concern over the DMF sought the establishment of a monitoring authority at the federal level even though collection of taxation towards the fund and its administration is vested with state governments for mining projects in their respective districts.

Under the Mines, Mineral Development and Regulatory (MMDR) Act 2015, DMF was created through mandatory contributions from miners of 10% equivalent of total royalty payable in the case of mining leases granted on or after January 2015 and 30% equivalent of total royalty payable if such mining leases were secured by miners prior to the date.

Government data showed that aggregate collection under the DMF across the country as of August 2018 amounted to $3.03-billion, but projects completed to alleviate the social and environmental impact of mining on the local population - the ostensible purpose of the fund - stood at $698-million as of the date.

According to the Parliamentary committee report, local authorities have also been grossly tardy in project implementation, with around 81 624 projects approved and sanctioned to receive funds from the DMF, but only 22 026 projects having been completed since the DMF was created in 2015, until August 2018.

It also pointed out that audits of various DMF districts were still to be completed, with the committee directing the Mines Ministry to take up with various state government agencies the issue of the completion of the audit of all DMFs up to 2017/18, by the end of March this year.

“The committee feels that the DMF was a defining opportunity benefitting millions of mining-affected people living in deep poverty in the country’s mining districts and it is very important that the DMF be implemented in the letter and spirit of the MMDR Act,” the report said.