CAG flags lapses in mining welfare scheme implementation in J&K

In its report for the period ending March 2023, the CAG stated that the PMKKKY scheme was launched to ensure the welfare of people affected by mining-related operations. “In contravention of PMKKKY guidelines, the areas and people affected due to mining were neither identified nor notified. Selection of projects under the scheme was carried out at the discretion of District Mineral Foundation Trusts (DMFTs), rather than being based on the actual needs of mining-affected communities,” the report stated.

The report further noted a delay of two years in framing the J&K District Mineral Foundation Rules, 2017, for minor minerals. These rules were not in consonance with the Mines and Minerals (Development and Regulation) Act, 2015 (MMDR), and were subsequently amended in February 2023 after audit observations made in May 2022. “Due to the framing of these contradictory rules, the department suffered a revenue loss of Rs 14.55 crore during 2017–18 to 2021–22. Additionally, due to the delay in registering and forming District Mineral Foundation Trusts, contributions amounting to Rs 8.82 crore could not be demanded and collected,” the report said.

The CAG also raised concerns that the department had not developed any mechanism for assessment, demand, and collection of royalty along with DMF contributions. The consolidated position of physical progress of sanctioned, ongoing, completed, and incomplete projects was not available at either the apex or divisional levels.

“Out of 365 sanctioned projects in eight sampled districts, 147 projects (40 per cent) were not taken up for execution, primarily due to the absence of administrative approval and site-related disputes. The governing bodies and executive committees of the Trusts had also not been constituted,” the report noted.

The CAG further observed that DMFT funds were advanced to various implementing agencies without the preparation of annual plans or budgets. Despite the availability of Rs 25.72 crore during 2017–18 to 2022–23, only Rs 11.89 crore (46 per cent) was utilised.

“Unspent balances were not invested. Utilisation Certificates were neither received nor demanded by some executing agencies in the Kashmir division. As 89 mineral check posts were not completed and the mine surveillance system was not installed despite incurring a liability of Rs 1.73 crore, illegal mining, transportation, and storage of minerals remained unchecked. A beneficiary survey revealed 96 per cent unawareness about the scheme and 100 per cent unawareness about DMFT activities among respondents. There was also a violation of scheme guidelines mandating electronic payments,” the report added.