Abstract
Mineral exploration in India began during the colonial period, when systematic systems were established for the exploration of minerals following the discovery of coal in Raniganj and Iron Ore in the Singhbhum District. As these mines are export-oriented, the people of these areas have to migrate to other regions, and the places become known as the “Mineral Curse Regions.” After independence government adopted a state-centric approach to minerals, and the mines were nationalised during this period. The main importance was given to import substitution and resource self-sufficiency. During the liberalisation reforms, the NMP 1993 allowed private and foreign direct investment, which is evident in the mining sector. According to the Shah Commission (2010), which shows that liberalisation exacerbated regulatory fragmentation and social inequality. MMDR Amendment Act 2015 established the District Mineral Foundation Trust in each Mining district. It was designed to share mineral royalties directly with local welfare and environmental restoration in mining-affected areas. The DMF in current times manages a fund of over one lakh crore, and yet the minerals-rich states of India still show low Human Development Indicators. India stands at a critical juncture in its mineral governance trajectory, despite having abundant mineral resources. Large sections of its mining-affected areas remain economically marginalised, environmentally degraded, and socially excluded, highlighting the gap between policy intent and policy outcomes. The DMF implementation has often been characterised by bureaucratic opacity, diversion of funds, and limited impact on human development outcomes. The existing research treats DMF and NMP separately; there is no alignment of how the national mineral policies interacts with the district level practices. This study addresses that crucial gap by analysing the degree of coherence between NMP objectives and DMF performance across India’s major mineral-producing states. Also, this study will adopt a mixed-methods approach, the research combines quantitative analysis of DMF financial and performance data (2015–2024) with qualitative field interviews and case studies from the North Eastern peninsular Belt (Odisha, Jharkhand, and Chhattisgarh).
Introduction
Mineral resources have played a crucial role in. India’s economic and political development from the colonial period to the present time. The systematic mineral exploration began under 37 midfield. British rule with their discovery of coal in Raniganj and iron ore in the Singhbhum region. This lays the foundation for an extractive mining economy primarily oriented towards the industry’s interest.[1]Early mining practices were characterised by the large-scale displacement of local and indigenous communities. Environmental degradation and a lack of regional development produce what leaders describe as mineral-rich regions, where resource abundance coexists with chronic underdevelopment.[2]
After independence, India adopted a state-controlled and nationalised mental governance framework. Driven by initiatives of import substitution, resource sovereignty, and strategic self-reliance, the Mines and Minerals (Regulation and Development) Act 1957 consolidated state control over mineral allocation and regulations, reinforcing a centralised governance model with limited local participation.[3] Meanwhile, nationalisation brought regulatory stability and facilitated industrial growth. It largely failed to address issues of environmental rehabilitation, community welfare, and participatory decision-making in mining-affected regions.[4]
The liberalization reforms of the early 1990s make a significant shift in mineral governance. The NMP 1993 opened the mining sector to private and foreign direct investment, which aims to enhance efficiency, technology transfer and exploration capacity.[5]But Liberalization without Strict regulations results in governance failure. The Shah Commission of Inquiry revealed widespread illegal mining, regulatory capture and environmental degradation in states such as Goa and Karnataka, which highlights the deepening of social and economic inequalities in their mineral rich regions.[6]
But after the Shah Commission, India undertook major reforms to ensure equitable distribution of mineral wealth. The Mines and Minerals Development and Regulation Amendment Act, 2015 introduced a new concept known as DMF, that is district mineral foundation It established in every mining district as a statutory trust to channel a portion of mining royalties towards the welfare of mining affected communities and the environmental restoration of those areas which are affected by mining.[7] Currently the DMF Holds over 1,00,000 crore of funds Multiple audit reports and civil society studies indicate that mineral rich states continue to record low human development indicators, revealing a persistent gap between policy intent and welfare outcomes.[8]
Parallelly to the Establishment of BMF the National Mineral Policy 2000 and 19 articulated a renewed vision for mineral governance grounded in sustainability, integrational equity, transparency I’m public trash doctrine.[9] This policy also recognizes minerals as a shared inheritance and emphasizes scientific mining practices. Environmental Stewardship and community benefit sharing. But still Existing research Largely treats an MP and DMF as independent framework. Without examining how national policy objectives translate into district level implementations.[10]
Moreover, this study addresses the critical gap by analyzing between the national mineral policy objectives and district mineral foundation framework. Using a mixed method approach, it evaluates within national level policy intent is effectively operationalized through district level institutions and whether such alignment produces tangible welfare outcomes in mining affected regions.
LITERATURE REVIEW
In one of the literature, Kinnari Bhat argues that India’s mental policy framework increasingly recognizes the states fiduciary obligation to manage mineral resources as a public trust for present and future generations.[11] Indian constitutional jurisprudence, particularly decisions in MC Mehta VS Kamal Nath and Goa Foundation VS union of India has reinforced the principle that natural Resources should not be exploited solely for the basis of revenue generation. And it must be governed in the public interest.[12] This doctrinal perspective is directly relevant to the District Mental Foundation, which is legally mandated to read. Distribute the mineral. To the mining affected communities for their restoration and compensatory justice.
A portion of the literature focuses on mining induced displacement, land acquisition and social justice, particularly in tribal and forested regions. Lahiri Dutt, Krishnan and Ahmad documents how large scale mining has resulted in systematic dispersion of indigenous communities, Laws of traditional livelihoods and long term socioeconomic vulnerability.[13] Similar studies published in the Economic and Political Weekly highlight the displacement is often inadequately compensated and poorly rehabilitated. Excabating. Inequality. And social Exclusion.[14]These work mainly emphasize the necessity of welfare mechanism like DMF for the prioritization of livelihood, restoration, education, health, sanitation And Social Security for mining affected populations.
This research, specifically examining the district member foundation, reveals significant governance and Implementation challenges the report. By the Common Cause and the Center for Science and Environment provide empirical evidence of widespread diversion of DMF funds towards projects and related to mining affected communities, such as urban infrastructure and administrative buildings.[15] These studies also identify weak transparency Mechanism., limited public disclosure and minimal participation of Gram Sabah ‘s. The Comptroller and Auditor General. Audit reports corroborate these findings, pointing on under utilization of funds, delays in projects execution and lack of outcome based monitoring.[16] Moreover this Literature suggests that while DMF represents a progressive institutional innovation, its implementation is constrained by governance deficits.
Environmental governance forms another critical strand of the literature. Studies examining mining regions such as Goa demonstrate how weak regulatory oversight has led to irreversible ecological damage, including deforestation, water contamination, and loss of biodiversity.[17] International organizations such as World Bank and UNEP stresses that sustainable extractive governance requires integrating environmental restoration, mine closure planning, and community participation into Resource management Framework.[18] Although NMP 2019 explicitly incorporates sustainability and intergenerational equity, existing research suggests that. Are inadequately reflected in DMF expenditure priorities
The literature on fiscal federalism and decentralisation provides important insights into the role of local institutions in resource governance. Amrinder Das argues that centralised control over the mineral revenues limits local development and advocates for a decentralised benefit-sharing mechanism.[19] BMF was convinced as such a mechanism. However, studies indicate that bureaucratic dominance and lack of institutional capacity have limited its effectiveness. Notably, existing scholarships tends to analyze national mineral policy reforms and DMF implementation separately without examining their interaction.
These literature reveals three critical gaps. First, there is no integrated analysis of how NMP principles influence DMF implementation. 2nd, there is a lack of analysis. Of policy implementation coherence in mineral governance. 3rd, there is a limited schematic evidence linking DMF expenditure to welfare outcomes. This study addresses these gaps by analyzing the synergy between NMP and DMF through a mixed method approach and by developing a synergy index to evaluate alignment between policy intent and district level outcomes.
CONCEPTUAL & THEORETICAL FRAMEWORK
This study is anchored in a multi-dimensional conceptual and theoretical framework that draws upon the public trust doctrine, intergenerational equity, good governance theory, and policy–implementation gap theory to analyse mineral governance in India. These theoretical perspectives collectively enable a systematic examination of how national-level mineral policy intent is translated into district-level welfare outcomes through institutional mechanisms such as the District Mineral Foundation (DMF). The framework recognises mineral governance as an interactive process involving policy formulation, institutional design, governance quality, and socio-economic outcomes rather than as a purely regulatory exercise.
At the normative core of this framework lies the public trust doctrine, which conceptualises the State as a trustee of natural resources rather than their absolute owner. Originating in Roman law and developed in modern jurisprudence by scholars such as Joseph Sax, the doctrine mandates that natural resources be managed for the collective benefit of present and future generations.[20]Indian constitutional jurisprudence has firmly incorporated this principle, particularly through decisions such as M.C. Mehta v. Kamal Nath and Goa Foundation v. Union of India, where the Supreme Court emphasised that mineral resources form part of the national commons and cannot be exploited in a manner that undermines public interest.[21] The National Mineral Policy 2019 explicitly reflects this doctrine by recognising minerals as a shared inheritance and by stressing transparency, sustainability, and equitable distribution of mineral wealth. Within this theoretical frame, DMF functions as a redistributive instrument through which the State discharges its fiduciary obligation to mining-affected communities.
Closely linked to the public trust doctrine is the principle of intergenerational equity, which holds that current generations have a moral and legal obligation to conserve natural resources for future generations. Edith Brown Weiss’ formulation of intergenerational equity emphasises that development must balance present economic needs with long-term environmental sustainability and social justice.[22]Given the finite and non-renewable nature of minerals, this principle is particularly relevant to mineral governance. NMP 2019 incorporates intergenerational equity through provisions on scientific mining, mine closure planning, environmental restoration, and rehabilitation of degraded land. DMF, in theory, complements this objective by funding environmental regeneration, livelihood diversification, and human capital development to compensate for irreversible resource extraction.
RESEARCH METHODOLOGY
A mixed-methods approach is particularly appropriate for this research , as it allows quantitative measurement of policy–implementation alignment to be complemented by qualitative insights into institutional functioning and community experiences.[23]The research design is explanatory and evaluative in nature, seeking not only to describe DMF operations but also to explain variations in welfare outcomes across mining-affected districts.
The study follows a convergent mixed-methods strategy, in which quantitative and qualitative data are collected and analysed concurrently and subsequently integrated through triangulation.[24] This approach strengthens the validity of findings by enabling statistical patterns to be interpreted alongside qualitative evidence drawn from field-level observations and stakeholder narratives. The methodological framework is grounded in the conceptual model developed in the preceding section, which links national policy intent, district-level implementation mechanisms, governance quality, and welfare outcomes.
The geographical focus of the study is the North-Eastern Peninsular mineral belt of India, with particular emphasis on the states of Odisha, Jharkhand, and Chhattisgarh. These states are among the most mineral-rich regions in the country, accounting for a substantial share of coal, iron ore, and bauxite production, while simultaneously exhibiting low human development indicators and high levels of tribal displacement
The resulting Synergy Index produces a score ranging from zero to one hundred, with higher values indicating stronger alignment between national policy intent and district-level implementation.
Quantitative data for the study are drawn from multiple authoritative secondary sources. These include the Ministry of Mines’ DMF dashboard for information on fund collection and utilisation, Comptroller and Auditor General (CAG) audit reports for insights into compliance and governance issues, NITI Aayog’s SDG India Index for state-level welfare indicators, and district-level DMF annual reports and planning documents.[25]Additional socio-economic data are sourced from the Census of India and National Sample Survey datasets, while environmental indicators are drawn from secondary environmental and remote-sensing databases. The use of multiple data sources enhances data reliability and allows for cross-verification of findings.
The quantitative analysis employs descriptive statistics to summarise trends in DMF fund flows, utilisation rates, and sectoral expenditure patterns. Correlation and regression analysis are used to examine relationships between Synergy Index components and welfare outcomes, thereby identifying key determinants of DMF effectiveness. Principal Component Analysis (PCA) is applied to validate the index structure and to identify dominant patterns in governance and performance indicators.[26]
ANALYSIS & DISCUSSION
The Synergy Index results indicate moderate to low alignment between national policy intent and district-level implementation across the sampled districts. SI scores vary substantially, reflecting differences in administrative capacity, transparency practices, and planning quality. Importantly, districts with larger DMF accruals do not consistently achieve better welfare outcomes, confirming that the magnitude of mineral revenues is not a reliable predictor of development gains. This finding aligns with the resource curse literature, which emphasises institutional quality rather than resource endowment as the primary determinant of outcomes.[27]
An assessment of policy alignment reveals that although state DMF rules formally reference the objectives of NMP 2019, these principles are only partially embedded in district planning and expenditure decisions. DMF plans frequently prioritise generic infrastructure projects—such as roads, administrative buildings, and urban amenities—over interventions that directly address mining-induced harms, including livelihood loss, health externalities, and environmental degradation. This divergence reflects a classic policy–implementation gap, wherein national-level commitments to sustainability and equity are diluted during local execution due to administrative incentives and capacity constraints.[28]
The analysis of DMF performance highlights persistent inefficiencies in fund utilisation and project execution.
This finding echoes earlier studies that question the effectiveness of input-driven welfare spending in the absence of outcome-oriented planning.[29]
Environmental outcomes constitute a particularly weak dimension of DMF implementation. Despite NMP 2019’s emphasis on sustainability, mine closure, and environmental restoration, DMF spending on ecological rehabilitation remains limited across most districts. Environmental projects are frequently deprioritised in favour of visible infrastructure initiatives that offer short-term administrative or political returns. This pattern reflects a misalignment between national sustainability commitments and district-level expenditure priorities and raises concerns about the long-term ecological costs of mineral extraction. The neglect of environmental restoration undermines the principle of intergenerational equity and reinforces the critique that mineral governance remains short-term in orientation.[30]
A comparative analysis across the three states reveals significant inter-state variation in governance practices and outcomes. Odisha generally demonstrates relatively higher synergy, attributable to clearer DMF guidelines, better administrative coordination, and more consistent disclosure practices. Jharkhand presents a mixed picture, with some districts showing improvements in transparency and utilisation, while others continue to struggle with fund diversion and weak participation. Chhattisgarh, despite its extensive mineral wealth, records lower SI scores due to low utilisation rates, severe environmental stress, and limited community involvement. These variations underscore the importance of state-level political commitment and institutional capacity in shaping district-level outcomes.[31]
FINDINGS
This finding highlights a structural policy–implementation gap between national policy articulation and district-level execution.[32]
The analysis of DMF performance identifies significant inefficiencies in fund utilisation and project execution. Although DMF collections have increased steadily since their inception in 2015, utilisation rates remain inconsistent across districts. Several districts accumulate substantial unspent balances, indicating weaknesses in planning capacity, administrative coordination, and project approval processes. Even where utilisation rates are relatively high, project delays and cost overruns are common, and systematic outcome monitoring is largely absent. These performance deficits undermine the redistributive intent of DMF and limit its effectiveness as a welfare institution.[33]
One of the most robust findings of the study is that governance quality is the strongest determinant of synergy and welfare outcomes. Districts with higher Synergy Index scores exhibit relatively stronger transparency mechanisms, including periodic disclosure of fund utilisation, regular audits, and some degree of community consultation. In contrast, low-performing districts are characterised by bureaucratic dominance in decision-making, limited public access to information, and minimal involvement of Gram Sabhas, particularly in Scheduled Areas. This pattern underscores the centrality of governance structures in shaping the outcomes of decentralised benefit-sharing mechanisms and confirms the relevance of good governance theory in explaining variations in DMF effectiveness.[34]
The study’s findings on welfare outcomes indicate that DMF interventions have produced selective and uneven improvements rather than comprehensive development gains.
These variations highlight the role of state-level political commitment and institutional capacity in shaping district-level outcomes.[35]
Qualitative evidence further illuminates the mechanisms underlying these quantitative patterns. Interviews with DMF officials frequently cite limited technical capacity, lack of specialised planning expertise, and ambiguity in expenditure guidelines as major constraints. CONCLUSION & POLICY RECOMMENDATIONS
A key insight emerging from the study is the decisive role of governance quality in shaping mineral governance outcomes. Districts characterised by relatively higher transparency, regular auditing, and some degree of community engagement demonstrate stronger alignment between policy intent and welfare outcomes. In contrast, districts marked by bureaucratic opacity, limited disclosure, and weak accountability consistently underperform, despite having access to significant DMF resources. This finding reinforces the normative and analytical importance of good governance principles in decentralised benefit-sharing mechanisms and highlights the risks of elite capture and administrative dominance in extractive-sector governance.[36]
The study also concludes that current DMF expenditure patterns are insufficiently oriented toward long-term welfare and sustainability. DMF spending frequently prioritises visible infrastructure projects that offer short-term administrative or political gains but do not adequately address the structural impacts of mining, such as livelihood loss, health externalities, and ecological degradation. Environmental restoration and mine closure planning, which are central to NMP 2019 and the principle of intergenerational equity, remain marginal in DMF expenditure portfolios. This short-term orientation undermines the sustainability of mineral-led development and raises concerns about the long-term ecological and social costs of continued extraction.[37]
Second, the study recommends strengthening transparency and accountability mechanisms within DMF governance. Mandatory, real-time public disclosure of DMF fund inflows, allocations, and project implementation status should be enforced uniformly across states through digital platforms. Independent audits must be conducted regularly, and audit findings should be made publicly accessible to enable social oversight. Transparency should be treated not as a procedural formality but as a foundational principle for restoring trust in mineral governance institutions.[38]
Third, there is a need to reorient DMF expenditure priorities toward sectors that generate long-term welfare and resilience. Health, education, livelihood diversification, drinking water, and environmental restoration should receive sustained and predictable funding. Environmental rehabilitation, in particular, must be treated as a core obligation rather than a discretionary activity, given the irreversible ecological impacts of mining. Integrating DMF planning with mine closure and environmental management frameworks would help operationalise the sustainability commitments of NMP 2019.[39]
Finally, the study recommends institutionalising a systematic evaluation framework, such as the Synergy Index developed in this research, to periodically assess alignment between national policy intent and district-level implementation. Such an index could serve as a diagnostic tool for identifying governance gaps, benchmarking performance across states, and guiding corrective interventions. Regular evaluation would shift mineral governance from a compliance-driven approach toward a learning-oriented and outcome-focused framework.
CONCLUSION
In conclusion, this research demonstrates that India’s mineral governance framework possesses significant potential to address the historical injustices and developmental deficits associated with mining. However, realising this potential requires moving beyond symbolic decentralisation and policy rhetoric toward genuine institutional reform, accountability, and participation. Strengthening the synergy between NMP and DMF is essential for transforming mineral wealth into sustainable welfare and for ensuring that mining-affected communities are not merely compensated but meaningfully included in India’s development trajectory. By aligning policy vision with institutional practice, India can move closer to a mineral governance model that is equitable, sustainable, and grounded in social justice.
[1]Geological Survey of India, History of Mineral Exploration in India (Gov’t of India 2018).
[2]Richard M. Auty, Sustaining Development in Mineral Economies: The Resource Curse Thesis 1–3 (Routledge 1993)
[3]Mines and Minerals (Regulation and Development) Act, 1957, No. 67, Acts of Parliament, 1957 (India).
[4] Kuntala Lahiri-Dutt et al., Land Acquisition and Dispossession in Jharkhand, 47 Econ. & Pol. Wkly. 39 (2012).
[5] Gov’t of India, National Mineral Policy 1993 ¶¶ 2.1–2.3 (Ministry of Mines 1993).
[6]Shah Comm’n, Report on Illegal Mining in Goa & Karnataka ¶¶ 4.2–4.5 (Gov’t of India 2014).
[7]Mines and Minerals (Development and Regulation) Amendment Act, 2015, No. 10, Acts of Parliament, 2015 (India).
[8]Comptroller & Auditor Gen. of India, Audit of District Mineral Foundations ¶¶ 3.1–3.6 (2019).
[9]Gov’t of India, National Mineral Policy 2019 ¶¶ 1.2, 2.4 (Ministry of Mines 2019).
[10]Kinnari Bhatt, Does India’s Draft Mineral Policy Recognize and Implement Public Trust over Mineral Resources, 3 Bus. & Hum. Rts. J. 243 (2018).
[11]Kinnari Bhatt, Does India’s Draft Mineral Policy Recognize and Implement Public Trust over Mineral Resources, 3 Bus. & Hum. Rts. J. 243 (2018).
[12]M.C. Mehta v. Kamal Nath, (1997) 1 S.C.C. 388 (India); Goa Foundation v. Union of India, (2014) 6 S.C.C. 590 (India).
[13]Kuntala Lahiri-Dutt et al., Land Acquisition and Dispossession in Jharkhand, 47 Econ. & Pol. Wkly. 39 (2012).
[14]Walter Fernandes, Mining, Displacement and Development, 42 Econ. & Pol. Wkly. 2028 (2007).
[15]Common Cause & SETU, District Mineral Foundation: Concerns and Recommendations (2018); Centre for Science & Environment, Cashing in on Mining (2018).
[16]Comptroller & Auditor Gen. of India, Performance Audit on DMF (2019).
[17]Goa Found., Report on Mining in Goa (2018).
[18]World Bank, Mineral Resource Governance Framework (2019); UNEP, Sustainable Extractive Sector (2018).
[19]Amarendra Das, Regulatory Authority over Minerals: A Case for Review, 44 Econ. & Pol. Wkly. 62 (2009).
[20]Joseph L. Sax, The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970).
[21]M.C. Mehta v. Kamal Nath, (1997) 1 S.C.C. 388 (India); Goa Foundation v. Union of India, (2014) 6 S.C.C. 590 (India).
[22]Edith Brown Weiss, In Fairness to Future Generations 21–24 (U.N. Univ. Press 1989).
[23]John W. Creswell & Vicki L. Plano Clark, Designing and Conducting Mixed Methods Research 5–7 (Sage 2018).
[24]Id. at 69–72.
[25]Comptroller & Auditor Gen. of India, Audit of District Mineral Foundations (2019); NITI Aayog, SDG India Index (2021).
[26]I.T. Jolliffe, Principal Component Analysis 10–12 (Springer 2002).
[27]Richard M. Auty, Sustaining Development in Mineral Economies 12–15 (Routledge 1993).
[28]Pressman & Wildavsky, Implementation 87–90 (Univ. of Cal. Press 1973).
[29]martya Sen, Development as Freedom 87–92 (Oxford Univ. Press 1999).
[30]Edith Brown Weiss, In Fairness to Future Generations 21–24 (U.N. Univ. Press 1989).
[31]Ministry of Mines, Indian Minerals Yearbook (Gov’t of India 2022).
[32]Pressman & Wildavsky, Implementation 87–90 (Univ. of Cal. Press 1973).
[33]Comptroller & Auditor Gen. of India, Audit of District Mineral Foundations (2019).
[34]U.N. Dev. Programme, Governance for Sustainable Human Development (1997).
[35]Ministry of Mines, Indian Minerals Yearbook (Gov’t of India 2022).
[36]U.N. Dev. Programme, Governance for Sustainable Human Development (1997).
[37]Edith Brown Weiss, In Fairness to Future Generations 21–24 (U.N. Univ. Press 1989).
[38]Comptroller & Auditor Gen. of India, Audit of District Mineral Foundations (2019).
[39]Gov’t of India, National Mineral Policy 2019 ¶¶ 1.2–1.4 (Ministry of Mines 2019).
