CAG flags rule breaches in Odisha mining foundation spending

The Comptroller and Auditor General of India has flagged major irregularities in the use of District Mineral Foundation funds in Odisha, saying money intended for people and areas affected by mining was spent without adherence to applicable rules. The findings are contained in a performance audit of the implementation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana and the functioning of District Mineral Foundations in Odisha up to March 2024. The report was tabled in the Odisha Legislative Assembly on Monday.

The audit said the identification of people directly and indirectly affected by mining was delayed in mineral-bearing districts. Odisha’s rules require each district foundation to identify and maintain a list of affected people so that livelihood, rehabilitation and resettlement projects can be planned. Only Jajpur, among six test-checked district foundations, had identified affected people during 2015-24, the CAG said.

It added that the failure to identify beneficiaries meant rehabilitation and resettlement could not be ensured or publicly uploaded. The report also examined spending in Jajpur, Keonjhar and Sundargarh. It said ₹4,541.66 crore was sanctioned for 1,114 projects in “common affected areas”, a category that the CAG said was not defined in the Odisha DMF Rules or the PMKKKY guidelines.

Of that amount, ₹2,578.73 crore was used without any rule provision, according to the audit. The CAG said the new category appeared to have been created to accommodate ineligible spending within prescribed limits. Rules allow no more than 40% of funds to be used in indirectly affected areas.

The audit said actual utilisation rose to 45.68% in Keonjhar and 41.10% in Sundargarh. In Jajpur, 43.54% of ₹1,164.43 crore utilised went to indirectly affected areas, while 36.60% was used directly affected areas, below the prescribed 60%.