Economy

States can tap up to 30 per cent of remaining DMF funds to combat Covid-19

Twesh Mishra New Delhi | Updated on March 29, 2020 Published on March 29, 2020

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Centre issues directives to allow using DMF funds for healthcare, screening and food distribution

The Centre has issued guidelines to allow State governments to utilise District Mineral Foundation (DMF) fund collections to combat the Covid-19 pandemic. These directives, issued on Saturday by the Ministry of Mines, said that expenditure related to Covid-19 should not exceed 30 per cent of the balance funds available with a DMF.

The MMDR Amendment Act, 2015, paved the way for setting up DMFs 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 such operations.

As of January, the total amount accrued under the DMF by the 21 mineral-rich States stood at ₹35,925.39 crore. The allocated amount stood at ₹30,651.59 crore, while the amount spent was at ₹12,414.38 crore. If the allocation for existing projects is left undisturbed, the 21 States will be left with about ₹5,000 crore for the relief measures.

Order necessitated

These fresh directives for DMF fund utilisation are issued under Section 20 A of the Mines and Minerals (Development and Regulation) Act, 1957, read with emergent national interest to combat the Covid-19 pandemic, an official in the know told BusinessLine.

The State governments have been asked to utilise the funds available under the DMF for supplementing and augmenting facilities of medical testing, screening and other requirements in connection with preventing the spread of Covid-19 as well as treating the patients affected by this pandemic.

The need for this order was necessitated because State governments were not allowed to tap into DMF collections for any purpose other than the development activities in districts from where minerals were mined. The rules were so strict that DMF collections from mining activities in one district could not be spent for development activities in any other district.

One-time relaxation

It is to be ensured that the expenditure related to Covid-19 does not exceed 30 per cent of the balance funds available with DMF, the letter from Secretary, Ministry of Mines, Sushil Kumar said. Kumar said that this is a one-time relaxation in utilisation of DMF collections.

“The DMF Funds can be utilised for purchase/installation of necessary medical equipment or creation of medical infrastructure as per the guidelines of the Ministry of Home Affairs and Ministry of Health and Family Welfare in those districts with at one Covid-19 positive patient,” the letter said.

“In all districts, funds can be used for purchase of face masks, soaps, sanitisers and food distribution for poor people if other available funds are not sufficient as certified by the District Magistrate,” the letter added.

Published on March 29, 2020

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