Chhattisgarh

• 17 Oct 2024

Chhattisgarh DMF Scam

Why in News?

Recently, the Enforcement Directorate (ED) has arrested a Chhattisgarh government official in relation to the District Mineral Foundation (DMF) scam.

Key Points

• DMF Scam Investigation:
  • The ED is focusing on widespread misuse of the DMF, which is meant to benefit communities affected by mining activities.
• District Mineral Foundation (DMF):
  • DMF is a non-profit trust established to work for the interest and benefit of people affected by mining operations.
  • Funded by a percentage of the royalty from mining companies, DMF aims to develop infrastructure and provide healthcare, education, and livelihood support in mining-affected areas.
• Enforcement Directorate (ED):
  • The ED is a law enforcement agency responsible for investigating and enforcing laws related to economic offenses, particularly money laundering under the Prevention of Money Laundering Act (PMLA), 2002.
  • It plays a key role in probing financial crimes and corruption, such as the current investigation into the DMF scam.

DMF Scheme

• About:
  • As per the Mine and Minerals Development Regulation (Amendment) Act, 2015, in every district affected by mining-related operations, the state government shall, by notification, establish a trust as a non-profit body to be called the District Mineral Foundation.
• DMF Funds:
  • Every mining lease holder is required to contribute a fraction of the royalty up to one-third towards the District Mineral Foundation (DMF), as per the rates set by the Central Government.
  • This fund will be used for welfare of the people affected in the mining affected areas.
• Objective:
  • The idea behind the contribution is that local mining-affected communities, mostly tribal and among the poorest in the country, also have the right to benefit from natural resources extracted from where they live.
• Functioning:
  • The functioning of the DMF trusts and the fund use governed by states’ DMF Rules incorporate the mandates of a central guideline, Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).