The Mines and Mineral (Development and Regulation) Act, 1957 (MMDR Act, 1957) was amended through the MMDR Amendment Act, 2015. One of the amendment provisions relates to introduction of section 9B which provides for the establishment of District Mineral Foundation (DMF) in any district affected by mining related operations. The object of the DMF is to work for the interest and benefit of persons, and areas affected by mining related operations.
The Ministry of Mines has notified the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015, on 17.9.2015, which prescribes the rate of contribution to DMF as follows:
- 10% of royalty in respect of mining leases granted on or after 12.1.2015; and
- 30% of royalty in respect of mining leases granted before 12.1.2015.
The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) has been launched by the Government which will be implemented through funds collected under DMF.
At least 60% of PMKKKY funds will be utilized for high priority areas like: (i) drinking water supply; (ii) environment preservation and pollution control measures; (iii) health care (iv)education; (v) welfare of women and children; (vi) welfare of aged and disabled people; (vii) skill development; and (viii) Sanitation. The rest of the funds will be utilized undertaking works like for: (i) physical infrastructure; (ii) irrigation; (iii) energy and watershed development; and (iv) any other measures for enhancing environmental quality in mining district.
The details of amount collected under DMF in 12 mineral rich states is provided below:
| S.No | State | Total Number of districts in which DMF has been set up | Total Amount Collected under DMFs (figures are in rupees crores) | |
| 1 | Goa | 2 | 40.99 | |
| 2 | Karnataka | 30 | 117.91 | |
| 3 | Chhattisgarh | 27 | 712.04 | |
| 4 | Odisha | 30 | 1432.91 | |
| 5 | Madhya Pradesh | 51 | 480.01 | |
| 6 | Jharkhand | 24 | 567.02 | |
| 7 | Rajasthan | 33 | 130.00 | |
| 8 | Telangana | 10 | 58.67 | |
| 9 | Andhra Pradesh | 13 | 28.09 | |
| 10 | Gujarat | 32 | 09.95 | |
| 11 | Maharashtra | 11 | 11.61 | |
| 12 | Tamilnadu | 0 | 0 | |
| Total | 263 | 3589.388 | ||
| Source: State Governments
Figures as on 10.10.2016 |
||||