DMFT fund audit in Jharkhand’s six districts flag ‘gross misuse’

The findings of the first ever audit of District Mineral Foundation Trust (DMFT) fund, collected under the provision of Mines Minerals (Development and Regulation) Act, point to “gross misuse” and “presumptive fraud”.

The audit was conducted by the Jharkhand’s Principal Auditor General (PAG) in six districts, where a sum of about Rs 3,000 crore was collected as DMFT fund between 2015 and 2021. The audit was conducted between December 2020 and April 2022.

Mines Minerals (Development and Regulation) Act provides for the establishment of District Mineral Foundation Trust that will work as a non-profit body for the benefit of people affected by mining and related operations, using a part of the royalty collected from the mining companies and contractors.

The PAG submitted its report to the Chief Secretary on April 22, auditing use of DMFT fund in Ranchi, Chatra, Lohardaga, Dhanbad, Bokaro and Hazaribagh districts between 2015 and 2021. The audit team in its report expressed dissatisfaction, saying the “Mines Department restricted its access to crucial and primary records” for audit and it “was a red flag to presumptive fraud and misappropriation”.

PAG Indu Aggarwal wrote in the report: “…restriction on access to crucial and primary records to audit despite assurance of full cooperation by the Secretary of the Department and the Chief Secretary is a red flag to presumptive fraud and misappropriation. These potentially derail the constitutional mandate of audit and prevent it from providing insights to the state legislature for fixing accountability on erring officials.”

The central government had launched Pradhan Mantri Khanij Chetra Kalyan Yojna (PMKKKY) in September 2015 and issued directives to the states to incorporate them in the DMFT fund rules. The primary mandate of the funds is to implement developmental and welfare projects in mining-affected areas, mitigate the adverse impact on the environment, uplift the health and socio-economic conditions of the people in mining districts, and ensure long-term sustainable livelihood of those affected.

In the report, the PAG has pointed out misuse of the funds in the construction of a ‘dak bungalow’ in Ranchi; renovation of a conference hall at Lohardaga Deputy Commissioner’s office; purchase of sound system, furniture for a meeting hall at Chatra DC office; construction of 24 open gyms in Bokaro district, among others.

Also, it pointed out zero spending in Jharia, the biggest mining-affected area in Jharkhand where people are exposed to ‘miserable’ living conditions.


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