District Mineral Foundations were envisaged as a tool to convert mineral wealth into local welfare, yet a large gap persists between funds sanctioned and utilized. Examine the reasons and suggest reforms.

District Mineral Foundations (DMFs), created under Section 9B of the MMDR Act, 1957 (inserted in 2015), convert mineral royalty into a dedicated local welfare corpus. Till January 2025, Rs 1,04,251 crore was collected and Rs 88,483 crore sanctioned, but only Rs 55,924 crore actually spent [1] — a gap that is institutional rather than financial.

Reasons for the sanction–utilization gap

• Paper sanction, weak execution: of 3.69 lakh sanctioned projects, about 2.08 lakh stand completed [1]. Sanctioning is a quick administrative decision; execution needs tendering, engineering and supervisory staff that district offices lack.
• No accountability for delay: the Standing Committee on Coal and Steel (2018) found no mechanism to fix responsibility for stalled works, and sought quarterly Centre–State review [2].
• Slow structural learning: in August 2018 only 22,026 of 81,624 projects were complete, worth Rs 4,888 crore of Rs 21,235 crore collected [2]; utilization has roughly doubled since, but nearly half the corpus still lies unspent.
• Sectoral, not beneficiary, earmarking: the mandate locks 70% by sector, not by affected population [3], so spending drifts to district headquarters while displaced families gain little — the Committee itself flagged this distortion [2].
• Weak participation: governing councils were bureaucrat-dominated, with lists of affected areas and beneficiaries unpublished, muting demand-side pressure [2].

Reforms needed

• Reorient the earmark towards people directly affected by mining, as the Standing Committee recommended [2].
• Operationalise the revised PMKKKY guidelines, 2024 — inclusion of MPs, MLAs and MLCs in Governing Councils, mandatory C&AG audit, and a State Level Monitoring Committee under the Chief Secretary [3].
• Institutionalise social audits by residents of mining-affected areas and public disclosure of funds, projects and beneficiaries on portals [2].
• Build district project management units, multi-year perspective plans and convergence with existing schemes [3].

DMF's problem is delivery capacity and voice, not resource scarcity. Pairing professional execution with genuine community participation can make the polluter-pays principle a lived reality, advancing inclusive growth and SDG-10 in India's mineral belts.