THEBUSINESSBYTES
BUREAU
BHUBANESWAR,
JUNE 4, 2026
In a significant policy reform aimed
at ensuring equitable and impact-driven development across mining regions, the
Odisha government has introduced a comprehensive mechanism for the
proportionate sharing of District Mineral Foundation (DMF) funds among
mining-affected districts.
The new framework, which came into
effect on June 1, seeks to align the utilisation of DMF resources with the
actual geographical impact of mining activities, ensuring that communities
bearing the environmental and socio-economic consequences of mining receive a
fair share of development benefits.
Under the revised guidelines, funds
generated from a mining project will be utilised exclusively in areas directly
or indirectly affected by that specific mine. The government has mandated a
70:30 allocation ratio, with 70 per cent of the funds earmarked for directly
affected areas and the remaining 30 per cent for indirectly affected regions.
To bring greater precision and
transparency to fund allocation, the government has defined mining impact zones
based on proximity to mine boundaries. Areas located within a 15-kilometre
radius of a mine will be classified as directly affected, while those falling
between 15 and 25 kilometres will be considered indirectly affected. No DMF
expenditure will be permitted beyond the 25-kilometre impact zone.
The reform also addresses
long-standing concerns regarding mines whose impact areas extend across
district boundaries. In such cases, DMF funds will be distributed among
affected districts in proportion to the mining-impacted area falling within
each district, ensuring a fair and data-driven allocation process.
To operationalise the new system, the Director of Mines and Geology will coordinate with the Odisha Space Applications Centre (ORSAC) for scientific mapping and identification of mining-affected zones. The geographical data generated through this exercise will form the basis for determining district-wise entitlement of DMF funds.
Officials said the move is expected to strengthen transparency, improve accountability in DMF utilisation, and accelerate infrastructure creation, livelihood support, healthcare, education and other welfare initiatives in mining-affected communities.
