CAG Highlights on Financial Practices (DMF Collections) for year 2019-2020
6.8.1 Non-remittance of money realised for the district mineral foundation into the Consolidated Fund of the State An amount of Rs. 19.52 crore realised towards DMF during April 2017 to December 2018 from the lessees of minor and major minerals was deposited into the current/saving accounts of the District Collectors concerned instead of the Consolidated Fund of the State, and were not utilised.
Government of Bihar notified Bihar District Mineral Foundations Rules, 2018 (May 2018) which provided that every lessee of major mineral shall pay to the District Mineral Foundation (DMF) an amount at the rate of 10 to 30 per cent of the royalty paid. Further, every lessee of minor mineral shall pay to the DMF an amount equal to two per cent of annual auction/settlement amount/ compounded royalty as the case may be.
Rule 8 of the Rules ibid also provided that the amount so collected for DMF shall be kept in any scheduled Bank. DMF funds were created for drinking water supply, environmental preservation and pollution control, health care, education, skill development, etc., to minimise/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of the people in mining districts.
Article 266 (1) of the Constitution of India provides that all revenue received by the Government of a State shall be credited into the consolidated fund of the State. However, Rule 8 of the Rules ibid is contrary to the Article 266(1) of the Constitution of India. Not depositing collection towards DMF into the Consolidated Fund of the State deprived the State Legislature to exercise its legislative oversight authority and is also fraught with risk of fraud and misappropriation.
Audit scrutiny of records of 129 DMOs revealed that Rs. 19.52 crore was realised towards DMF during April 2017 to December 2018 at the prescribed rate from lessees of minor and major minerals and was deposited into the current/saving bank accounts of the District Collectors concerned instead of the Consolidated Fund of the State and were not utilised. The matter was reported to the Department in December 2018; their reply was still awaited (September 2019).
Recommendation: The Department should amend Bihar District Mineral Foundations Rules, 2018 to ensure that it does not violate Article 266 (1) of the Constitution of India. Further, the Department should remit the funds collected towards DMF into the Consolidated Fund of the State.
6.8.2 Non-levy of contribution money towards district mineral foundation Twelve MOs did not realise Rs. 23.84 lakh towards district mineral foundation (DMF) from concession holders of brick earth as they failed to incorporate the condition of levy towards DMF in permit conditions. Audit scrutiny of records of above 12 test checked DMOs revealed that an amount of Rs. 11.92 crore was realised as royalty from concession holders for extraction of brick earth during 2017-18. However, the MOs concerned did not realise two per cent of the settlement/auctioned amount towards district mineral foundation (DMF) as they failed to incorporate the condition of levy towards DMF in permit conditions. This resulted in non-realisation of Rs. 23.84 lakh. The matter was reported to the Department in December 2018; their reply was still awaited (September 2019). Click Here to read report
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