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VOL. I · EST. 11.2025 
SatyaDheesh
सत्याधीश
India's Ground Truth Record
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DMFs in Odisha Spend ₹2,578.73 Crore Without Rules, Audit Finds

GS3Economy · S&T · Environment · Security· Industry, investment & MSMEs· Mains·

Mineral governance and fiscal accountability: a GS3 case study on decentralized fund management.

Why in news

The Comptroller and Auditor General (CAG) reported major irregularities in the utilization of District Mineral Foundation (DMF) funds in Odisha, where ₹2,578.73 crore was spent without rule provisions.

Background

The CAG report highlights that DMFs in Keonjhar, Sundargarh, and Jajpur spent over 40% of funds in 'Common affected areas' without clear definitions. Only one out of six test-checked DMFs identified affected people as required by Rule 11(1) and 11(3).

Facts for Prelims

  • BodyComptroller and Auditor General (CAG) is the supreme audit institution of India
  • Fact₹2,578.73 crore was utilized without rule provisions in Odisha DMFs
  • FactDMFs in Keonjhar, Sundargarh, and Jajpur spent over 40% of funds in 'Common affected areas'
  • FactRule 11(1) and 11(3) mandate the identification of affected people by DMFs

Prelims practice question

Which rules mandate the identification of affected people by District Mineral Foundations (DMFs)?

  1. (a)Rule 15(1) and 15(3)
  2. (b)Rule 10(1) and 10(3)
  3. (c)Rule 11(1) and 11(3)
  4. (d)Rule 5(2) and 5(4)
Show answer

Answer: (c) Rule 11(1) and 11(3) — The CAG report highlights that Rule 11(1) and 11(3) mandate the identification of affected people by DMFs.

For Mains

Q. Critically examine the institutional mechanisms required to ensure transparency and accountability in the utilization of District Mineral Foundation (DMF) funds for mining-affected communities.

Dimensions to cover in your answer

  • Audit oversight: Weakness in real-time monitoring of fund diversion to undefined 'common' categories
  • Regulatory compliance: Failure to adhere to Rule 11(1) and 11(3) regarding beneficiary identification
  • Fiscal leakages: Risk of misappropriation in decentralized mineral wealth distribution

Keywords: Accountability · Fiscal Transparency · Mineral Governance · Audit Irregularities · Decentralized Planning

Read the full news →Report a mistake in this noteSource: The Hindu ↗Also: GS2 · Transparency, accountability & RTI

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