Introduction
Since the time of independence the government of India has passed many laws focusing on many sectors with a strong emphasis on public sector to achieve self-sufficiency and sustainability. Some of the major parts were steal, coal and power generation with mining being the most disputed and sought after area. These mining issues needed urgent attention during these post-independence periods with regards to licensing, lease and management issues. India wanted to achieve sustainability which was clear from the various proposals and measures taken for nuclear and atomic programs. Atomic energy was an important asset during the cold war era for the countries to become self-reliant as it was used to generate power and electricity. This dragged attention of the lawmakers to focus on mining policy and governance with the increasing risks of scarcity of electricity and further blocking the progress of the country. In order to understand the nuances of mining and minerals (development and regulation) act ,1957 amended in 2015 and 2016 we have to understand the history of mining in general and get an idea about the issues of present scenario. The mining sector has gone through several reforms and regulations since the 19th century with first being proposed in 1890, then having an officially enacted mines act of 1901 which was the first legislation regarding mines passed in British India. Since then mine act has been re- enacted in 1923,1928 and 1935 subsequently. After these legislations, Mines and Minerals (development and regulation) act 1957(MMDR) which was further amended in 2015 and 2016 was introduced. During the pre and post–independence period, a number of coalfields were opened in India viz. Bokhara coalfield (1908), Rampur coalfield and Ib River valley coalfield (1913), increasing the annual coal production during the period. Not only coal but also many other sectors like iron and steel like Tata iron and steel company played a very significant role in the mining industry. With this boom in the mining industry it was obvious that it would bring new set of problems with it. Even though the legislature made attempts to counter it with these laws it was inefficient as they were unsuccessful at the implementation stage. For having a sustainable regulation, the laws need coherent at both the law making and the execution level which caused problems such as corruption and scandals harming the greater cause of human rights and social justice. Therefore, the Pradhan Mantri Khanij Kshetra Kaylan Yojana was introduced to bring about convergence in the centre and state mining rules through District Mineral Foundation, a trust that works for the benefit of the people and areas affected by mining operations under Section 9B of the MMDR act which states –
In any district affected by mining related operations, the State Government shall, by notification, establish a trust, as a non-profit body, to be called the District Mineral Foundation.
SEC 9B of MMDR act mainly consists of
- Purpose: The DMF works for the welfare of the people and areas affected by mining.
- Composition and functions: The state government can prescribe the composition and functions of the DMF.
- Central government involvement: The Central Government can issue directions to the state governments on the composition and utilization of DMF funds.
The need of such a scheme was to have set guidelines for the working of DMFs at the state and district level as many states were not complying with the laws of the centre which resulted in scams and raised human rights concerns.
PMKKKY compliance in Odisha DMF Rules: Status 2025_cfdra
Thus the PMKKKY’s intent was to set guidelines for these DMFs and complement the workings of the state government for the benefit of people and areas affected by mines. In this particular blog we are going to understand the ambit of state centre rules with regards to mining as to what are the areas of non-compliance or key differences where there is a scope of malice and could be used to exploit human rights practices. By keeping polluter’s pay principle in mind and analyse the risks. The three key objectives of PMKYYY are-
- To implement sustainable development programs in mining affected areas.
- To ensure the wellbeing of health, environment and socioeconomic conditions of the people affected by mining or living in the areas affected by mines.
- To have a sustainable impact on the human rights of the people affected by mining.
The PMKKKY divides the sectors into two areas with a ratio of 60 40 percent where 60 percent belongs to high priority sectors and 40 percent to other priority areas. The industries covered in both the areas
| High priority sectors with 60 percent funds | Other priority sectors with 40 percent funds |
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Physical infrastructure
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Further we are going to analyse the compliance issues between ODMF and PMKKKY and highlight the key rules, issue and differences to have an idea about implementation of the PMKKKY guidelines at the grassroots and whether it is coherent with the state policies. The ODMF Rules, 2015, govern the rules of District Mineral Foundations in Odisha. The Pradhan Mantri Khanij Kshetra Kalyan Yojana is a scheme they implement using their funds.1 Although the PMKKKY gives a framework, the ODMF Rules detail its implementation in Odisha. Some points where Odisha’s implementation, according to the ODMF Rules, does not fully align with the PMKKKY guidelines are:
| Sl. No | Topic Issue | Compliance by ODMF | Rule | Explanation | |
| 1 | Identification of affected areas and people | Complied | 11(1)(2)(3) of ODMF,1(1)(2) of PMKKKY | Both the rules mention the same ambit of affected areas and persons | |
| 2 | General Guidelines | Complied | 11A of ODMF, 2(2) guideline of PMMMKY | The ODMF provides rules for general guidelines which aligns with PMKKKY such as complementing online government schemes | |
| 3 | Utilisation of funds | Complied | Rule 10 of ODMF,Guideline 2 of PMKKKY | The ODMF and PMKKKY both list permissible activities. | |
| 4 | Regarding funds of bank accounts | Partial/Not clear | Rule8(4) ODMF,Guideline2(2)(d) PMKKKY | PMKKKY is more specific about the purpose of such a fund. | |
| 5 | Creation of posts and Purchase of vehicle | Partial/Not clear | Rule 11A(5) ODMF, guideline 2(2)(b) PMKKKY | The ODMF allows for creation of a post or have a temporary vehicle while the PMKKKY doesn’t mention anything | |
| 6 | Bank accounts in General | complied | Rule 8 ODMF,guideline 4 PMKKKY | Both the rules specify requirement of the payments by the trust. | |
| 7 | Implementation of works and contracts | complied | Rule 13 ODMF, guideline 4 PMKKKY | The ODMF Rules prioritize the execution of works through government departments and agencies, aligning with the PMKKKY’s emphasis on following due procurement procedures prescribed by state governments | |
| 8 | Utilisation of funds for overhead costs | Unclear | Rule 11A (4) of ODMF, guideline 2(2)(b) of PMKKKY |
The ODMF Rules permit administrative costs up to 5% of annual receipts or a lower limit set by the government, while the PMKKKY only mentions a 5% cap. This implies Odisha could set a lower limit, potentially restricting administrative spending more than the PMKKKY suggests. | |
| 9 | Spending of the amount | Not clear | Rule 10 (C) of ODMF | “Provided that if the Board is of the view that it is necessary in the interest of the welfare of the affected people and of the development of the affected areas so to do, it may take up projects for other priority areas in excess of the limits specified in this sub-rule” Nothing as such is mentioned in PMKKKY | |
| 10 | Annual report | Complied | Rule 16 of ODMF, Guideline 7 of PMKKKY | Both the ODMF Rules and PMKKKY guidelines stipulate the preparation and submission of annual reports by the DMF | |
| 11 | Audit | Complied | Rule 15 of ODMF, guideline 6 of PMKKKY | The ODMF Rules and PMKKKY guidelines both require annual audits of DMF accounts by a chartered accountant, with the report made public | |
| 12 | Provision for scheduled areas
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Complied | Rule 12 of ODMF, Guideline 3 of PMKKKY | Both the ODMF Rules and PMKKKY guidelines emphasize the involvement of Gram Sabha in the planning and implementation of projects in scheduled areas | |
| 13 | Environmental preservation and pollution control | Not clear | ODMF Rule 10 (A)(ii), Guideline 2(1)(b) | PMKKKY Guideline 2(1)(b), while listing similar environmental activities, doesn’t include such a restriction. This broader language could be interpreted as allowing DMFs to fund projects even if they overlap with the lessee’s responsibilities. | |
These are the key differences between the centre and the state rules which can create divergence and create confusion with regards to the actual intent of the legislature and the state rules incoherent with those central rules. However, the ODMF rules are mostly in compliance with some of the areas being unclear. As it can be observed in this scenario that the state rules should be taken up convergent with the central rules of PMKKY of the Mines and Minerals (development and regulation) act,1957 which talks about the workings of the DMF. The process adopted by PMKKKY is explicitly mentioned in Provisions contained in Article 244 read with schedule V and Schedule VI to the Constitution relating to the administration of the scheduled tribe areas. As far as the legal understanding of this particular issue is concerned the rules of the state and he centre should go hand in hand especially in the cases of human rights by allocating the funds in principle of “pro rata” which means the proportional distribution of something (with regards to allocation of funds in this scenario) based on specific ratio between state and centre.
Thus, given the history of mining in India, the government must be careful while dealing with such issues, while also creating a system of checks not only in the legislature but mainly in the executive as everything boils down to the grassroots at the implementation stage. Not having a system of check system could aggravate human rights issues slowing down the pace of development as we know that mining was a crucial sector and will be for the coming years.
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