In a significant move aimed at ensuring equitable development, the Odisha government has announced a new policy for the distribution of District Mineral Foundation (DMF) funds.
Effective from June 1, 2026, the allocation will now be strictly based on the actual impact of mining operations rather than the location of the mine alone.
According to the notification issued by the Planning and Convergence Department, DMF contributions collected from any mine will be utilised only in its directly and indirectly affected areas in a 70:30 ratio. Areas within 15 kilometres from the mine boundary will be classified as Directly Affected, while those between 15 and 25 kilometers will be considered Indirectly Affected. No DMF funds can be used beyond the 25-kilometer radius.
The policy is expected to bring more transparency and fairness in the utilisation of millions of rupees collected under DMF.
How the New Formula Works
If a mine’s impact spreads across multiple districts, the funds will be distributed proportionately based on the geographical area affected in each district.
The Director of Mines, in collaboration with the Odisha Space Applications Centre (ORSAC), will use geospatial data to map the affected zones accurately and share the details with the concerned District Collectors.
Example 1: A mine in the Rayagada district generates ₹100 crore in DMF funds, with its impact extending into Kalahandi.
- Direct impact share: ₹70 crore (Rayagada 65% | Kalahandi 35%)
- Indirect impact share: ₹30 crore (Rayagada 70% | Kalahandi 30%)
Final allocation: Rayagada ≈ ₹66.5 crore | Kalahandi ≈ ₹33.5 crore
Example 2: A mine in Angul affects Sambalpur and Deogarh.
Assuming the given area shares, Angul would receive ₹44 crore, Sambalpur ₹33 crore, and Deogarh ₹23 crore out of ₹100 crore.
The Deputy Director of Mines in the district where the mine is located will calculate the district-wise distribution, obtain approval from the local District Collector, and intimate neighboring Collectors.
This data-driven and impact-based approach is being hailed by experts as a progressive step that will minimise disputes between districts and ensure faster development of roads, schools, hospitals, drinking water projects, and livelihood initiatives in genuinely affected regions.
The policy is expected to benefit thousands of families living near major mining hubs in districts like Angul, Rayagada, Keonjhar, Sundargarh, and Koraput.
With stricter geographical limits, the government also aims to prevent diversion of DMF funds for non-mining-related projects far away from the actual impact zones.
This forward-looking initiative reinforces Odisha’s commitment to responsible mining and inclusive growth.
