Transparency Test: Evaluating Odisha’s DMF Funds

The District Mineral Foundation (DMF) funds in Odisha, meant to uplift mining-affected regions, have long been mired in controversy. While the previous government launched numerous high-profile projects, allegations of mismanagement and incomplete work have cast a shadow over their utilisation. The recent decision by the new administration to involve a third-party auditor, Grant Thornton, to evaluate DMF projects is a step in the right direction, but questions linger about the independence and effectiveness of such an exercise.

Mineral-rich districts like Keonjhar and Anugul have seen massive spending under DMF, with thousands of crores allocated to infrastructure, beautification, and welfare schemes. However, reports suggest that nearly 20% of projects in Anugul alone remain unfinished, raising concerns about accountability. Media investigations and civil society groups have flagged irregularities, including hurried spending without proper outcomes. The National Human Rights Commission (NHRC) has even sought action from the state chief secretary over underutilization, underscoring the gravity of the issue.

The new government’s amendments to DMF rules, imposing stricter controls on fund transfers, are welcome. Earlier, district collectors had considerable discretion in spending, which led to allegations of favouritism and inefficiency. The revised guidelines aim to ensure funds are used purposefully, with greater oversight. However, the real test lies in enforcement. Past experiences show that well-intentioned policies often falter in implementation, especially when political and bureaucratic interests collide.

The appointment of Grant Thornton to audit DMF projects is a positive signal, but scepticism remains. The firm’s findings will only inspire confidence if the process is transparent and free from government interference. Unfortunately, the track record of state-commissioned audits in India is mixed, with many reports either watered down or shelved. If this evaluation is to have any impact, its methodology and findings must be made public, and corrective action must follow. Moreover, past evaluations of government schemes have often been reduced to mere formalities, with critical findings ignored. To break this pattern, the audit report must be made binding, with clear consequences for mismanagement and delays.

Beyond audits, Odisha needs a robust mechanism for community participation in DMF planning and monitoring. Local residents, who are the intended beneficiaries, often have little say in how funds are used. Greater involvement of gram sabhas and civil society would not only improve accountability but also ensure that spending aligns with grassroots needs rather than political vanity projects.

The DMF funds represent a golden opportunity to transform mining-affected areas, but only if used wisely. The new government’s efforts to tighten norms and evaluate past spending are commendable, but they must be followed by tangible action. Without genuine transparency and accountability, even the best policies will fail to deliver justice to the people these funds are meant to serve.