CAG Audit Exposes Widespread Misuse of Chhattisgarh's Mining Welfare Funds

The Comptroller and Auditor General (CAG) has found serious governance failures in the implementation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) in Chhattisgarh. The audit examined the state's District Mineral Foundation Trust (DMFT) fund of Rs 13,101 crore between 2015-16 and 2023-24, uncovering policy deviations, fund diversion, tender violations, and transparency gaps.

Launched in 2015, PMKKKY aims to support mining-affected areas and communities through DMFTs, which receive contributions from mining leaseholders. Of the total fund, Rs 10,253 crore (78%) was spent on various works in the state.

The CAG found that the Chhattisgarh DMFT Rules, 2015, deviated from the central scheme by expanding the definition of 'affected people' to include all residents in mining-affected districts, without specific limitations. This allowed trusts to spend Rs 709.47 crore on distributing free items to people in both directly and indirectly affected areas. In 30 cases worth Rs 28.11 crore, distributions were made randomly without defined criteria or identified beneficiaries, thus diluting benefits meant for the most affected populations.

Despite spending 81% of available funds (Rs 4,536.58 crore), 754 out of 1,734 directly affected villages (44%) in 11 sampled districts remained uncovered. Trust funds were also spent on non-eligible works such as welcome gates, collectorate gardens, government office renovations, official vehicles, and grants to private educational institutions.

The audit noted that funds were used without preparing master plans, vision documents, or annual plans for sustainable livelihoods. Affected areas were identified with delays ranging from five months to five years, while Rs 1,060.70 crore was allocated before identification. Lists of directly affected villages were issued through collector orders but not notified as required under DMFT Rules.

Poor planning and monitoring led to unfruitful expenditure of Rs 41.80 crore on incomplete works and unutilised assets like an art and culture centre, biogas plants, and poultry centres. Another Rs 30.73 crore was spent on construction and procurement for government offices outside PMKKKY's priority areas.

Implementing agencies procured goods worth Rs 17.49 crore through limited quotations without open tenders, and Rs 38.82 crore without technical specifications, violating the Chhattisgarh Store Purchase Rules, 2002. Key posts remained vacant in several districts: Bemetara and Mahasamund reported 100% manpower shortages, while Balod, Bilaspur, Raigarh, and Rajnandgaon had over 50% vacancies.

The state government did not incorporate the PMKKKY provision requiring DMFT accounts to be audited by the CAG. The Khanij Online portal, used for royalty payments, lacks a system for minor minerals to capture DMF contributions, making verification difficult.

The CAG concluded that these lapses violated DMFT Rules and undermined the welfare of mining-affected communities.