District Mineral Fund Current Affairs - 2020

What are DMF Funds that are to be used by the states to combat COVID-19?

Finance Minister Nirmala Sitaraman recently instructed the state governments to use DMF (District Mineral Foundation) funds to fight against COVID-19. This is being done to supplement medical facilities that will help fight against Corona Virus.

What are DMF Funds?

The District Mineral Foundation is a non-profit body. It was set up in those districts that were affected by mining works. The Foundation works towards the benefit and interest of the persons affected due to the mining activity. The Funds are allocated according to the rules of MMDR act.


The DMF funds were set up under Section 9B of Mines and Minerals (Development and Regulation) MMDR amendment act. The act says that every mine holder has to contribute 10% of their loyalty towards the funds.

Pradhan Mantri Khanij Khsetra Kalyana Yojana

The DMF funds are used to implement the scheme. The scheme focuses on safeguarding environment, health and economic conditions of the tribal people. This is because, most of the productive mines in the country are located in the tribal areas.

DMF Funds

The DMF funds so far were used for drinking water supply, health care, environment preservation, women welfare, education, sanitation and skill development.

Centre asks states to step-up spending under District Mineral Fund

The Central government has asked the states to step-up the spending under District Mineral Fund as just 24 per cent of the Rs 23,606-crore mopped up under the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) was actually spent. The central government has also issued directions to ensure that there is no fund diversion or leakage.

Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)

Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) is aimed at the welfare of areas and people affected by mining-related operations, using the funds generated by District Mineral Foundations (DMFs). The objectives of the PMKKKY are:

  • To implement various developmental and welfare projects/programs in mining-affected areas that complement the existing ongoing schemes/projects of State and Central Government.
  • To minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts.
  • To ensure long-term sustainable livelihoods for the affected people in mining areas. Care has been taken to include all aspects of living, to ensure substantial improvement in the quality of life.

Further, the scheme mandates that 60 % share of the funds be spent on high priority areas like drinking water supply, health care, sanitation, education, skill development, women and child care, the welfare of aged and disabled people, skill development and environmental conservation.

Balance funds can be used for creating a supportive and conducive living environment by making roads, bridges, railways, waterways projects, irrigation and alternative energy sources.

The Mines and Minerals (Development & Regulation) Amendment Act, 2015 makes it mandatory for the miners to contribute to the District Mineral Funds a percentage of the royalty payable to the government. The funds accumulated in the District Mineral Funds would be used for implementing PMKKKY.