A recent audit by the Comptroller and Auditor General of India (CAG) has uncovered widespread misuse of funds within Karnataka's District Mineral Foundation Trust (DMFT). The report reveals that district administrations sanctioned hundreds of ineligible projects, diverting crores of rupees meant for the welfare of communities in mining-affected areas.
Massive Diversion of Priority Funds
The CAG audit, which scrutinized the DMFT's operations, found a blatant violation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) guidelines. Out of 3,584 works approved with an allocation of Rs 2,670 crore across four districts—Ballari, Chitradurga, Vijayanagara, and Gadag—the audit identified 212 "ineligible works" worth a staggering Rs 300 crore. These funds were collected from mining companies specifically for the development of regions impacted by mining activities.
The PMKKKY mandates that 60% of DMFT funds must be directed towards high-priority sectors. These include drinking water supply, environmental preservation, healthcare, education, and welfare schemes for vulnerable groups like women, children, and persons with disabilities. The audit pointed to serious shortcomings in allocating money to these critical areas.
Specific Cases of Irregular Spending
The report details several egregious examples of fund diversion. In Chitradurga, money earmarked for environmental preservation and pollution control was used to construct animal enclosures for tigers, birds, and leopards at the Adumalleshwara zoological park and Binkadatti zoo, costing Rs 3.2 crore.
In Ballari, funds designated for physical infrastructure like roads, bridges, railways, and waterways were instead spent on unrelated projects. These included installing high-mast lamps, building Nada Kacheris, police stations, staff quarters, and infrastructure for the new deputy commissioner's office, accounting for Rs 152 crore.
Further irregularities were flagged in Holalkere, where Rs 1.5 crore sanctioned for a state forest staff training centre was used to build a forest department guest house. An additional Rs 2 crore meant for a skill development centre was spent on a guest house at Vanivilas Sagar. In Hosadurga, shops were constructed at a government hospital instead of a planned godown.
Failures in Groundwater and Disaster Management
The CAG report also highlighted critical failures in planning and monitoring. It criticized the Karnataka Groundwater Authority (KGA) for a "planning without data" approach that has exacerbated water stress. The KGA lacked essential time-series data on borewells, including their numbers in the state and in water-distressed taluks like Belagavi, Chikkaballapur, Davanagere, and Ramanagara.
The audit noted that the authority failed to control illegal groundwater extraction for commercial purposes via private tankers and did not enforce the mandatory minimum 500-meter distance between borewells. Several southern districts, including Bengaluru Urban, Chikkaballapur, Kolar, and Chitradurga, were already classified in the overexploited zone.
On flood monitoring, the audit found that the Karnataka State Natural Disaster Monitoring Centre's system was largely ineffective. Of the 105 sensors installed at a cost of Rs 1 crore, a shocking 49 were non-functional, severely hampering early warning capabilities.
The CAG's findings paint a picture of systemic mismanagement, where funds collected for alleviating the adverse impacts of mining have been redirected, undermining the core objectives of the PMKKKY scheme and depriving affected communities of crucial development.
