CAG flags misuse of Odisha DMF funds, unapproved 'common affected areas' category
CAG's performance audit of PMKKKY and Odisha's District Mineral Foundations finds rule violations, an undefined spending category and unspent norms on affected-area identification.
A performance audit of the Pradhan Mantri Khanij Kshetra Kalyan Yojana and the working of District Mineral Foundations in Odisha has found that DMF money was spent in breach of prescribed limits, including through a spending category that exists in neither the state's DMF rules nor the central scheme's guidelines.
The report, covering the year ended March 2024, was tabled in the Odisha Legislative Assembly on Monday.
Under the Odisha DMF Rules, 2015, no more than 40% of a foundation's funds may be used for activities in indirectly affected areas. The audit found this ceiling was crossed in Keonjhar, where 45.68% was spent in such areas, and in Sundargarh, where the figure was 41.10%.
At the same time, the two foundations reported spending 30.67% and 22.67% of their sanctioned amounts respectively under a head called "common affected areas" — a category the audit notes is not defined in the state rules or in the PMKKKY guidelines. In Jajpur, 19.86% was booked under the same head. The audit concluded that the new category served only to accommodate ineligible expenditure within the prescribed limits.
Records showed that Rs 4,541.66 crore was sanctioned for 1,114 projects in common affected areas across the Jajpur, Keonjhar and Sundargarh foundations, of which Rs 2,578.73 crore was utilised without any rule provision. The foundations, the audit said, had failed to limit and prioritise spending between identified directly and indirectly affected areas.
In Jajpur, Rs 1,164.43 crore was utilised, of which Rs 507.02 crore, or 43.54%, went to indirectly affected areas, exceeding the 40% cap without justification. Against the prescribed 60% share, only Rs 426.11 crore, or 36.60%, was spent on projects in directly affected areas.
The audit also faulted the identification of beneficiaries. Rules require each district foundation to prepare and maintain a list of affected people so that long-term sustainable livelihood projects can be taken up. Between 2015 and 2024, only one of the six foundations test-checked — Jajpur — had identified affected people; the rest had not identified those affected directly or indirectly by mining. As a result, rehabilitation and resettlement could not be ensured or put on public websites.
The report further found that projects were implemented in ways that did not conform to DMF rules.