| GS Paper 3: Economy, Effects of Liberalization on the economy, Changes in industrial policy and their effects on industrial growth. |
Why in the News?
The Indian government’s Mines and Minerals Act of 2015, which introduced auctions and created the District Mineral Foundation (DMF), remains instrumental in ensuring local communities benefit from resource-driven development.
As DMF enters its 10th year, it has accumulated nearly ₹1 lakh crore, turning mineral wealth into a vital source of development for these regions.
Context
- The intervention of the higher judiciary in 2014, followed by the Modi government’s 2015 amendment to the Mines and Minerals (Development and Regulation) Act, ushered in a new era of resource management in India.
- One of the key outcomes of these reforms was the establishment of District Mineral Foundations (DMFs).
- This prompts a deeper exploration of DMFs’ journey, focusing on their role in community-driven development, innovation, and cooperative federalism.
The Origin of District Mineral Foundations
- DMFs were introduced as part of Prime Minister Modi’s vision to empower local communities, positioning them as critical stakeholders in the nation’s resource-driven development.
- The 2015 amendment mandated the creation of DMFs in mining districts, funded by contributions from license holders and lessees.
- This move signified not just a legal or financial change but a fundamental shift in how the government approached resource management.
- By linking mineral extraction to community welfare, DMFs aimed to transform an exploitative industry into one that supports long-term, sustainable livelihoods for those affected by mining.
DMFs: Transformation and Achievements
- From Losses to Community-Centric Growth
- DMFs have dramatically reshaped India’s mineral wealth management.
- Before their establishment, the allocation of mining rights led to significant financial losses, with the Comptroller and Auditor General (CAG) reporting large revenue shortfalls between 2004 and 2009 due to coal block mismanagement.
- DMFs were created to address the needs of communities most affected by mining. Over the past decade, they have accumulated an impressive ₹1 lakh crore to fund a wide range of projects benefiting these local populations.
- Building a Financial Corpus for Local Development
- The DMF fund has enabled district administrations in mineral-rich states to undertake vital community projects, addressing long-neglected areas.
- With nearly ₹1 lakh crore collected, DMFs have financed over 300,000 projects across 645 districts in 23 states.
Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)
About Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY):
Objective: Launched under the DMF, PMKKKY aims to implement welfare and development projects in mining-affected areas, focusing on reducing the adverse effects of mining and promoting sustainable livelihoods.
Complementary Approach: PMKKKY complements existing state and central government schemes, enhancing district development efforts. Its projects span healthcare, education, skill development, sanitation, water supply, and sustainable livelihoods.
It has also supported women’s empowerment through self-help groups and offered youth skill development initiatives, such as drone technology training.
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- The DMFs operate under the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) framework, which aims to minimize the adverse effects of mining and secure sustainable livelihoods for affected communities.
- DMF-funded projects complement existing state and central government programs, amplifying the overall impact of developmental efforts.
- Impact on Skill Development and Employment
- One of DMFs’ most notable contributions is in skill development and job creation.
- For example, in Katni, Madhya Pradesh, DMFs have funded vocational training programs that equip youth with skills in drone technology, opening doors to job opportunities previously unavailable in their region.
Social, Economic, and Environmental Impact at the Local Level
- Healthcare Infrastructure Development
- DMFs have addressed critical healthcare needs in mining-affected areas, which often face challenges like air and water pollution.
- Investments include building hospitals, mobile health clinics, and water purification systems, significantly improving healthcare access in these regions.
- Education and Human Development
- Education has been a major focus, with DMFs funding the construction of schools, scholarships, and teacher training in districts suffering from high illiteracy rates.
- These efforts have improved educational outcomes, offering better futures for children in mining-affected communities.
- Environmental Restoration and Sustainable Livelihoods
- DMFs have also played a pivotal role in environmental restoration, funding afforestation projects, soil conservation, and water management to address the environmental toll of mining activities.
DMFs: Catalysts for Inclusive Growth and Cooperative Federalism
- Promoting Cooperative Federalism
- DMFs exemplify cooperative federalism, operating through coordinated efforts at the national, state, and local levels.
- The ‘National DMF Portal’ has further enhanced transparency and efficiency in DMF project management, creating a digital platform for monitoring and oversight.
- Catalysts for Growth
- DMFs have evolved into powerful tools for inclusive governance and resource management, aligning local and national priorities to ensure that India’s mineral wealth benefits those most in need.
- By balancing economic growth with social welfare, DMFs are transforming mineral-rich regions into hubs of community-driven development.
The Road Ahead
- Moving forward, the key challenge will be balancing local innovation with standardized best practices.
- Integrating DMFs with broader government initiatives, such as the National Critical Minerals Mission, can ensure that India’s mineral wealth fosters not just economic growth but also social equity and environmental sustainability.
Conclusion
- By centering local communities in resource-driven development, DMFs have mitigated the negative impacts of mining and created new opportunities for sustainable livelihoods.
- Through innovation, cooperation, and convergence, DMFs offer a model for inclusive governance that can be replicated across India.
- As the country continues to develop its mineral resources, DMFs will play a crucial role in ensuring that this wealth benefits all, setting a global standard for responsible resource management.
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