A recent audit by the Comptroller and Auditor General of India (CAG) has uncovered significant deficiencies in the system designed to aid people affected by mining activities in Maharashtra. The report highlights a failure to properly identify beneficiaries and a massive unpaid contribution of ₹242 crore by the Maharashtra State Road Development Corporation (MSRDC) related to the Nagpur-Mumbai Samruddhi Expressway.
Key Failures in District Mineral Foundation Trusts
The audit scrutinised the functioning of District Mineral Foundation Trusts (DMFTs) in five districts: Nagpur, Bhandara, Chandrapur, Yavatmal, and Raigad. These trusts are mandated to implement welfare measures for communities impacted by mining, funded by a contribution equivalent to 10% of the royalty paid by leaseholders.
However, the CAG found a fundamental flaw: none of the DMFTs had prepared a list of actual beneficiaries. This critical omission made it impossible to monitor whether the intended benefits and mitigation measures ever reached the affected persons. Consequently, the core objective of the trusts was severely undermined.
The Samruddhi Expressway Contribution Controversy
A major financial discrepancy pointed out in the report involves the MSRDC. While the corporation was granted a full exemption from paying royalty for excavating minor minerals to build the Samruddhi Expressway, it was not exempt from contributing to the DMFTs.
The audit clarifies that a June 2021 government directive confirmed MSRDC's liability. Based on 10% of the royalty that would have been charged, the CAG calculated MSRDC's outstanding contribution for minerals lifted until June 2021 at a staggering ₹242 crore. In response to the audit observation, the state government stated that the mining department would take up the matter with MSRDC.
Outdated Norms Limit Benefit Reach
The report further criticises the DMFTs for not updating their operational guidelines. Despite a change in norms, all five audited trusts continued to identify affected areas only within a 5-kilometer radius of mines, instead of the revised 10-kilometer radius. This outdated practice arbitrarily excluded persons living between 5 to 10 km from mining sites from receiving any welfare benefits.
Financially, the DMFTs in these districts received substantial funds, totalling ₹3,354 crore between September 2016 and March 2023. The audit also flagged accounting inconsistencies, noting a discrepancy of ₹50 crore in the Nagpur DMFT between the contribution amount reported by the trust and its certified accounts.
The CAG report, which was submitted during the state legislature's winter session in Nagpur, paints a picture of systemic failure in managing funds and executing welfare schemes for some of the state's most vulnerable communities impacted by mining operations.
