Why must people be poor in a state rich with minerals?, Pg11

Key Highlights:

• Jharkhand possesses nearly 40% of India’s total mineral wealth, including coal, iron ore, bauxite, and limestone, yet its mining districts remain underdeveloped.
• The District Mineral Foundation Trust (DMFT) was established by the Centre in 2015 to ensure a portion of mining revenues benefits communities affected by mining.
• West Singhbhum district in Jharkhand accumulated nearly Rs 3,700 crore under its DMFT between 2016 and 2026, but the funds have not translated into improved local conditions.
• Jharkhand has auctioned only three mineral blocks since 2019-20, compared to Odisha's 45 and Chhattisgarh's 41, despite being mineral-rich.
• In 2025-26, Odisha generated approximately Rs 46,000 crore in mining revenue, while Jharkhand generated about Rs 22,000 crore, despite having more than double Odisha's mineral resources.

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Detailed Insights:

• The establishment of DMFT aimed to address the imbalance where mining-affected communities bear significant social and environmental costs but receive minimal benefits.
• DMFT Rules require public disclosure of annual reports, budgets, project progress, and beneficiary details, which are often missing or inaccessible in Jharkhand.
• Delayed auctions of expired mining leases in Jharkhand have led to stagnation in mineral production and reduced royalty collections.
• This stagnation directly impacts DMFT contributions, thereby limiting resources available for development in mining-affected villages.
• The contrast with Odisha highlights governance issues, as Odisha's timely auctions and efficient management have led to increased production and revenue.
• The lack of effective management of existing resources in Jharkhand raises concerns about the state's ability to handle new industrial plans or investments.
• The failure of DMFT in Jharkhand is primarily administrative, not financial, indicating a breakdown in implementation and accountability.

Key Concepts Involved:

• District Mineral Foundation Trust (DMFT): A non-profit trust established in mining districts to work for the welfare and benefit of persons and areas affected by mining operations.
• Mining Lease: A legal agreement granting a party the exclusive right to explore for, extract, and remove minerals from a specific area for a defined period, in exchange for rent or royalties.
• Royalty: A statutory payment made by a mining lease holder to the government (the sovereign owner of mineral resources) for the right to extract minerals, typically based on the quantity or value of minerals produced.