Mumbai/New Delhi: An under-utilized $3.1 billion fund targeted at the poorest in India’s mining belt could prove to be a crucial resource in the South Asian nation’s fight against the coronavirus pandemic.
Created under a new law in 2015, the so-called District Mineral Foundation funds have nearly 238 billion rupees, after less than 40% of the amount accumulated over the past five years was spent, according to data from the country’s mines ministry. The funds were created from contributions by miners in addition to royalty payments and were aimed at improving the lives of people in areas affected by mining.
That could come to the aid of mining states, which decide how the funds should be used, after a nationwide lockdown shut factories, malls and offices, bringing the economy to a halt. As restrictions begin to ease, the states will need the funds to buy protective equipment, strengthen their medical infrastructure and create jobs.
“The DMF has come as a huge support for mining districts,” Amit Kumar, the deputy commissioner of Dhanbad district in Jharkhand known for its coal mines, said on Friday. “At the moment we have seven positive cases, but should the numbers rise, we will not be short on funds to deal with this.”
Dhanbad has used the funds for filling in staff vacancies at hospitals and for water and sanitation projects, an investment that’s being put to good use today, Kumar said.
The contagion is escalating in the South Asian nation of 1.3 billion people, with 150,793 infections, including 4,344 deaths as of Wednesday, according to data from Johns Hopkins University. To combat the virus, India’s government introduced the world’s biggest lockdown in March and extended it until May 31, while easing restrictions in certain sectors to boost economic activity.
The lockdown has had a damaging economic impact, with the country hurtling toward its first full-year contraction in four decades. An estimated 122 million people lost their jobs in April while consumer demand has evaporated.
“DMFs in various states and districts cannot afford to put the issue of livelihood in the backseat anymore,” Srestha Banerjee, a consultant at Brooking India, said in a report. “Given the urgency of the economic situation, the states and districts must shore-up investments towards this.”
Bureaucratic hurdles, ignorance by local political representatives of the DMF and its aims, lack of monitoring mechanisms and little pressure from the affected communities for its adequate utilization are some of the reasons for the slow deployment of funds in projects, according to Oxfam.
While some states like Chhattisgarh have spent a big portion of the funds on welfare projects, others like Odisha, which has collected the highest amount at 100 billion rupees, have spent about 35% so far, according to the mines ministry.
There is a lack of transparency and public accountability in the implementation of various welfare projects, Oxfam said. There is need for a mandatory monitoring mechanism tracked by the federal government, to ensure these funds are spent on projects that benefit communities and their local environment and livelihood rather than on capital and infrastructure projects only, it said. –Bloomberg