Rajasthan brings new rules to develop the mining-affected areas

20 Jun 2025 GS 3 Economy
    Live Views: Loading...

Rajasthan’s New DMFT Rules – 2025

Fund Collection Structure:

  • 30% of royalty from old major mineral mines.

  • 10% each from auctioned major mineral mines and minor mineral mines.

Fund Allocation (as per new rules):

  • 70% for High-Priority Areas, 

  • 30% for Other Priority Areas,

Geographical Focus:

  • Welfare works to be implemented within a 25 km radius of mining-affected areas.

Institutional Support:

  • Project Management Units (PMUs) will be created in districts where mining royalty exceeds ₹50 crore, 10% of the DMFT corpus will be reserved as an endowment fund

District Mineral Foundation (DMF)

Statutory Backing:

  • Introduced through the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDR Act).

  • Legal provision: Section 9B of the MMDR Act, 1957 (as amended in 2015).

Objective:

To work for the interest and benefit of persons and areas affected by mining-related operations, especially tribal and backward regions.

Fund Collection:

Contribution by Mining Lease Holders:

As per the MMDR Act (2015) and subsequent government notifications:

Type of LeaseDMF Contribution Rate
Mining leases granted before 201530% of royalty amount
Mining leases granted after 201510% of royalty amount

  • The fund is collected at the district level but linked to mineral production.

  • Collected by State Governments; maintained in a non-lapsable DMF Trust account.

Fund Usage Guidelines:

As per the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), 2015, DMF funds must be used as follows:

🟢 High-Priority Areas (at least 60% of DMF funds):

  1. Drinking water supply

  2. Environment preservation and pollution control

  3. Health care

  4. Education

  5. Welfare of women and children

  6. Skill development

  7. Sanitation

  8. Slum development

  9. Welfare of aged and disabled people

🟡 Other Priority Areas (up to 40% of funds):

  1. Physical infrastructure (roads, bridges)

  2. Irrigation

  3. Energy and watershed development

  4. Agricultural and livestock development

  5. Forest and environment conservation

  6. Strengthening district administration (max 5%)

Governance Structure:

LevelRole & Responsibility
District DMF TrustHeaded by District Collector or District Magistrate.
State GovernmentNotifies rules, manages fund allocation priorities, oversight.
Central GovernmentIssues model guidelines (e.g., PMKKKY), policy direction.

Key Statistics :

  • Funds collected since inception: Over ₹70,000 crore across India.

  • Top contributors: Odisha, Chhattisgarh, Jharkhand, Rajasthan, Madhya Pradesh.

Issues & Criticism:

  1. Underutilisation: Many states lag in actual fund disbursal.

  2. Diversion of funds: Some states used DMF funds for unrelated projects.

  3. Lack of transparency: Poor monitoring and public participation.

  4. Top-down planning: Community participation in fund planning is often missing.

(General Rule):

  • No uniform national rule mandates a fixed radius for states.

  • However, under the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) guidelines issued by the Ministry of Mines, Government of India, it is recommended that:

    "Priority should be given to works in directly affected villages/gram panchayats, followed by indirectly affected areas within the district."

  • States are empowered to define the exact implementation radius through their own DMFT rules.

    • For example:

      • Rajasthan: 25 km radius

      • Chhattisgarh and Odisha: Focus on directly affected areas, then peripheral blocks

      • Jharkhand: Preference to affected gram sabhas




← Back to list