New Delhi | A parliamentary panel has expressed concerns over several cases of diversion of funds of District Mineral Foundation (DMF) in several states for purposes other than welfare of mining-affected areas.

The DMF is a non-profit statutory 'fund' for every Indian district affected by mining related operations. It is aligned with the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), to ensure effective and equitable utilisation of these funds to address the challenges of communities inhabiting the mining regions and for their sustainable development.

The panel is "concerned to note that there are many cases of diversion of the funds of DMFs or purposes other than the stipulated ones, in many States as informed by the Ministry of Mines. Such diversions, the Committee notes, took place in the form of transfers to State treasury/consolidated fund of the State or State level funds (by whatever name called) or Chief Minister's Relief Fund or other funds or schemes", said the Standing Committee on Coal, Mines and Steel in its recent report.

The panel further said such transfers are violative of letter and spirit of the mining act which facilitated the setting up of DMF and defeat the purpose of the creation of the fund.

The committee, while noting the orders issued by the mines ministry to prevent such unauthorised transfer of funds from DMF for purposes other than the stipulated ones, strongly recommended that they may be apprised of any diversion of funds.

The "diversions may be disincentivised by imposing penalties on DMFs," it said.

DMFs have been set up in 645 districts of 23 states in the country.

Till January 2025, the total amount collected under DMF is Rs 1,04,250.74 crore and sanctioned a total of 3.69 lakh projects worth Rs 88,483.24 crore, wherein 2.08 lakh projects have been completed spending Rs 55,923.65 crore.