The Comptroller and Auditor General (CAG) of India has released a scathing audit of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) in Chhattisgarh, exposing how the state’s mining‑welfare fund deviated far from its statutory mandate. Launched in 2015, the scheme was intended to channel mining lease contributions into development programmes for mining‑affected districts. Yet, between FY 2015‑16 and FY 2023‑24, the District Mineral Foundation Trusts (DMFTs) in the state received a total of ₹13,101 crore, of which ₹10,253 crore (≈78 %) was spent on a wide array of projects, many of which bear little relevance to the intended beneficiaries.

Policy Intent versus Ground Realities

PMKKKY envisions the creation of a dedicated trust in each mining district, funded by mining and quarry lease‑holders, to finance health, education, livelihood and infrastructure interventions for communities directly impacted by mining activities. The CAG report, however, notes a deliberate broadening of the “Affected People” definition, effectively encompassing all residents and workers in the mining zones, irrespective of whether they face the specific adverse effects the scheme seeks to mitigate.

Key Irregularities and Their Impact

Audit scrutiny of 30 cases amounting to ₹28.11 crore revealed that ₹709.47 crore was disbursed as “free items” without any transparent criteria, beneficiary lists or verification mechanisms. Consequently, 754 out of 1,734 directly affected villages (about 44 %) remained untouched in the sampled districts. Moreover, substantial portions of the fund were diverted to non‑eligible expenditures such as welcome gates, ornamental gardens, renovation of government offices, procurement of official vehicles, and grants to private educational institutions.

Administrative Lapses and Transparency Gaps

Critical planning documents—master plans, vision statements, and annual work plans—were largely absent, leading to unproductive spending of ₹41.80 crore on incomplete projects like an Art & Culture Centre, biogas plants, and poultry‑mushroom units. Procurement processes flouted the Chhattisgarh Store Purchase Rules, 2002: ₹17.49 crore were procured through limited quotations without open tenders, and another ₹38.82 crore were bought without any technical specifications. Staffing shortages compounded the problem, with key posts such as Project Coordinators and Accountants vacant in several districts, some experiencing 100 % vacancies.

Recommendations and Way Forward

The CAG’s remedial suggestions include publishing definitive lists of affected villages, preparing comprehensive master and annual plans, instituting social audits, strengthening monitoring mechanisms, and ensuring that the PMKKKY provision for CAG‑audited DMFT accounts is fully complied with. Implementing these measures could restore the fund’s original purpose—sustainable development for mining‑affected communities—while setting a benchmark for other mineral‑rich states.