A COMPTROLLER and Auditor General (CAG) performance audit has exposed systemic deficiencies in Chhattisgarh’s District Mineral Foundation (DMF) regime, revealing that Rs 4,870.19 crore was utilised in 12 sampled districts without annual plans and budgets, while hundreds of villages directly affected by mining remained outside the welfare net. ‘The Hitavada’ has accessed and meticulously examined the 82-page CAG Report No 05 of 2026 on implementation of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), including District Mineral Foundation Trusts (DMFTs), in Chhattisgarh. The performance audit principally covers 2015-16 to 2023-24 and records findings concerning fund management, beneficiaries, planning, procurement, execution, monitoring and accountability. The findings assume significance amid continuing investigations by the Enforcement Directorate (ED) and State Economic Offences Investigation and AntiCorruption Bureau (SEOIACB) into the alleged DMF scam. The CAG audit neither determines criminal culpability nor links its individual findings to transactions under investigation by the agencies. According to the report, Chhattisgarh’s DMFTs received Rs 13,101.65 crore and spent Rs 10,253.22 crore up to 2023-24. In the 12 sampled districts, Managing Committees did not prepare mandatory annual plans and budgets and utilised Rs 4,870.19 crore, or 79.18 per cent of receipts totalling Rs 6,150.42 crore, without a budgetary framework. The audit recorded another significant finding concerning identification of beneficiaries. DMFTs in the 12 sampled districts allocated Rs 709.47 crore for beneficiaryoriented schemes and works without identifying the ‘affected people’ envisaged under PMKKKY. These included free distribution of shade-nets, agricultural tools and implements, personal tube wells, fishnets and coaching and tuition assistance. A test-check of 30 cases involving Rs 28.11 crore found distributions were made randomly without stipulated beneficiary-selection criteria.

 

The CAG further recorded that Bilaspur and Sukma authorities reported no ‘directly affected people/families’ under the applicable definition, yet their Trusts allocated Rs 106.94 crore to implementing agencies for procurement and free distribution of items among villagers. The beneficiary gap extended to villages. Despite utilisation of Rs 4,536.58 crore, or 81 per cent of available funds, 754 of 1,734 directly affected villages, representing 44 per cent, remained uncovered in 11 sampled districts. In Sukma, Rs 333.61 crore was utilised without identification of directly affected villages. Affected areas themselves were identified five to 65 months after establishment of the Trusts, while Rs 1,060.70 crore had already been allocated before such identification. The spending trail included Rs 41.80 crore termed unfruitful expenditure by the CAG on incomplete works and unutilised assets, including an Art and Culture Centre, biogas-driven power generation plants and poultry and mushroom production centres. Another Rs 30.73 crore was provided for 80 projects and activities outside PMKKKY priority areas, including welcome gates, Collectorate gardens, government-office construction or renovation, office purchases, land-record digitisation and promotion of district administration social-media networks. Procurement practices also came under scrutiny. Implementing agencies procured items and services worth Rs 17.49 crore through limited quotations without open tenders, while Rs 38.82 crore worth of goods and services was procured without stipulated technical specifications, according to the audit. The report separately flagged movement of DMF money to the State-level DMF Cell. Despite the Government of India’s July 12, 2021 direction against transferring DMF funds to a State-level fund, the audit found Rs 1.68 crore was subsequently transferred by Trusts in Balod, Bilaspur and Korba. It further recorded that Rs 10.82 crore remained outstanding with the State-level DMF Cell as of March 2024.

 

The State Government furnished its explanation, but the CAG maintained that the outstanding amount had yet to be returned to the Trusts. Audit-trail deficiencies were also documented. All 12 sampled DMFTs failed to maintain prescribed registers and ledgers covering administrative sanctions, fund releases and utilisation certificates. Records of works and activities were maintained in editable Excel spreadsheets, which the CAG described as vulnerable to alteration. Procurement records produced by implementing agencies in all 12 districts were kept in loose files, preventing assurance about their completeness. Korba Trust records were also maintained in loose files without chronological organisation. The findings come against the backdrop of the separate ED and SEOIACB investigation into alleged irregularities in DMF contracts, including allegations of commissions and kickbacks. The CAG report does not establish that transactions examined in its performance audit and those forming part of the criminal investigation are identical. The CAG additionally flagged absence of social audits, inadequate disclosure of information and manpower shortages. Bemetara and Mahasamund recorded 100 per cent manpower shortage, while shortages exceeded 50 per cent in Balod, Bilaspur, Raigarh and Rajnandgaon. The audit period spans successive political administrations. The report was forwarded to the State Government on June 12, 2025, replies were received on August 22, and an exit conference was held on August 25, 2025. The Government’s responses were incorporated into the final report.