Ministry of Mines, through amendment in Mines & Minerals (Development & Regulation) (MMDR) Act, in 2015, has made a provision for establishment of DMF in all districts affected by mining.

About DMF 

• DMFs are established as a non-profit Trust in 645 districts across 23 states.
• Objective: To work for the interest and benefit of persons and areas affected by mining related operations.
• Composition and functions of DMF shall be such as may be prescribed by State Government.
• DMF also given responsibility to implement Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).
  • Under PMKKKY, 70% of the fund should go for high priority and 30% for other priority sectors
• Fund collected: DMFs have accumulated over Rs 1,03,000 crores

Key Issues with DMF and PMKKKY

• Unspent Funds: More than half remains unspent due to poor fund deployment and execution.
  • Only 3 states have allocated over 70% of funds toward high-priority sectors.
• Lack of Local Representation: DMF bodies are dominated by officials and political members; only 5 states have mining-affected communities in the Governing body.
• Lack of Planning: No districts have published a five-year perspective plan despite a 2022 directive. 
• Impact Assessments: DMFs have not conducted social audits or impact assessments to measure the effectiveness of their investments.