T.N. govt. revises rules on using funds for people hit by mining operations

The Tamil Nadu government's decision to revise the rules for utilizing the District Mineral Trust Fund (DMTF), mandating that a minimum of 70% of the funds be spent on areas directly affected by mining operations, marks a significant step towards ensuring social justice and sustainable development in the state. This move is not an isolated incident but is rooted in a broader national framework aimed at mitigating the adverse impacts of mining.

**Background Context and Historical Evolution:**

Historically, mining activities, while contributing significantly to a nation's economy, have often come at a heavy cost to local communities and the environment. Indigenous populations and rural residents living near mining sites frequently bear the brunt of environmental degradation, displacement, health issues, and loss of livelihoods, without adequately sharing in the economic benefits. Recognizing this inherent injustice, the Indian government, through the **Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)**, sought to regulate the mining sector. However, a dedicated mechanism to address the welfare of mining-affected communities was largely absent for decades.

The pivotal change arrived with the **MMDR Amendment Act, 2015**. This amendment introduced Section 9B, which mandated the establishment of a **District Mineral Foundation (DMF)** in every district affected by mining-related operations. The primary objective of DMFs is to work for the interest and benefit of persons and areas affected by mining-related operations. Mining leaseholders are required to contribute a percentage of their royalty to these foundations. For leases granted after the 2015 amendment, the contribution is 10% of the royalty, while for pre-existing leases, it is 30% of the royalty. This legislative change was a direct response to long-standing demands for equitable sharing of mineral wealth and addressing the socio-economic and environmental consequences of mining.

**What Happened: Tamil Nadu's Proactive Stance:**

While the MMDR Act, 2015, established the DMFs and outlined their broad objectives, the specific rules for their functioning and fund utilization are often framed by state governments. The Tamil Nadu government's recent revision of DMTF rules (which is the state's nomenclature for DMF) is a proactive measure to enhance the effectiveness and impact of these funds. By mandating a minimum of 70% of the funds for "directly affected areas" and prioritizing "high-priority sectors" like drinking water supply and healthcare, Tamil Nadu is ensuring that the benefits are concentrated where they are most needed. This addresses a common criticism that DMF funds were sometimes spread too thinly or diverted to projects in non-affected areas, diluting their intended purpose.

**Key Stakeholders Involved:**

1. **Tamil Nadu Government:** As the policy framer and implementer, it plays a crucial role in ensuring the effective functioning of the DMTF.

2. **District Mineral Trust Fund (DMTF) Boards:** Chaired by the District Collector, these boards are responsible for planning and executing welfare projects.

3. **Mining Companies:** As contributors to the fund, their compliance is essential.

4. **Local Communities/Residents:** Especially those residing in villages directly impacted by mining, they are the primary beneficiaries and their participation in needs assessment is crucial.

5. **Union Ministry of Mines:** Provides the overarching national policy framework and guidelines for DMFs.

6. **Civil Society Organizations/NGOs:** Often advocate for the rights of affected communities and monitor fund utilization.

**Significance for India and Broader Implications:**

This policy revision holds immense significance for India. Firstly, it embodies the principle of **social justice**, ensuring that those who bear the costs of resource extraction are the primary beneficiaries of its wealth. This can lead to improved living standards, better health outcomes, and enhanced access to basic amenities in historically neglected regions. Secondly, it strengthens **decentralized governance** by empowering district-level bodies to address local needs effectively. Thirdly, it can foster **sustainable development** by integrating welfare measures with resource management, potentially reducing conflicts between mining operations and local populations. From an economic perspective, it ensures a fairer distribution of the wealth generated from natural resources, aligning with the concept of inclusive growth.

**Constitutional Provisions and Policy Linkages:**

The MMDR Act, 1957, under which DMFs are established, falls under the concurrent powers of the Union and States as outlined in the **Seventh Schedule of the Constitution**. Specifically, Entry 54 of the Union List (regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest) and Entry 23 of the State List (regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union) are relevant. The welfare objectives align with the **Directive Principles of State Policy (DPSP)**, particularly **Article 38** (State to secure a social order for the promotion of welfare of the people), **Article 39** (principles of policy to be followed by the State for securing citizens' livelihood and equitable distribution of material resources), and **Article 47** (duty of the State to raise the level of nutrition and the standard of living and to improve public health). Furthermore, if mining occurs in Scheduled Areas, the **Provisions of the Panchayats (Extension to Scheduled Areas) Act, 1996 (PESA Act)**, would be critical, emphasizing the role of Gram Sabhas in decision-making related to minor minerals and development projects.

**Future Implications:**

Tamil Nadu's revised rules could serve as a model for other states to adopt more stringent and beneficiary-focused guidelines for their DMFs. This could lead to a nationwide improvement in the welfare of mining-affected communities. However, challenges remain, including ensuring robust monitoring mechanisms to prevent fund misuse, accurately identifying "directly affected areas," and fostering genuine community participation in project planning and implementation. The success of this policy will depend on transparent governance, accountability, and the active involvement of all stakeholders to translate the legislative intent into tangible benefits on the ground.