What is the common examiner trap about Polity in UPSC exams?

Confusing 'Common affected areas' as a legitimate category under PMKKGY or Odisha DMF Rules, when it is an unauthorised creation. Also swapping the 40% limit for indirectly affected areas with 60% for directly affected areas.

What should UPSC aspirants remember about Polity for Prelims?

1. Target this Data: ₹4,541.66 crore (sanctioned) and ₹2,578.73 crore (utilised) under 'Common affected areas' 2. Target this Nodal Body: District Mineral Foundation (DMF) and Comptroller and Auditor General (CAG) 3. Target this Legal Point: Rule 10(D) of Odisha DMF Rules, 2015 – 40% cap on indirectly affected areas

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News 12 of 14

CAG Flags ₹4,541.66 Cr DMF Irregularities in Odisha; Funds Exceeded Limit for Indirectly Affected Areas

Q: Which constitutional authority conducted the performance audit of PMKKKY in Odisha that unearthed DMF irregularities?

Comptroller and Auditor General (CAG), The CAG is the constitutional auditor under Article 148 of the Constitution, empowered to audit accounts of the Union and states. In this news, the CAG conducted the performance audit of PMKKKY in Odisha and tabled the report in the Odisha Legislative Assembly.

Q: Consider the following statements regarding the CAG report on DMF funds in Odisha: 1. The DMFs of Keonjhar and Sundargarh spent more than 40% of funds on indirectly affected areas. 2. The Odisha DMF Rules, 2015 allow spending up to 60% on indirectly affected areas. 3. Only DMF Jajpur had identified affected people during the period 2015-24. Which of the statements given above is/are correct?

Both 1 and 3, Statement 1 is correct as the CAG found Keonjhar (45.68%) and Sundargarh (41.10%) exceeded the 40% limit. Statement 2 is incorrect – Rule 10(D) caps indirectly affected area spending at 40%, not 60%. Statement 3 is correct – the report states only Jajpur DMF had identified affected people.

Q: According to the CAG report, what was the total amount of DMF funds sanctioned for projects in 'Common affected areas' in the three DMFs of Jajpur, Keonjhar, and Sundargarh?

₹4,541.66 crore, The CAG report specifically states: 'DMF funds amounting to Rs. 4,541.66 crore were sanctioned for execution of 1,114 projects in common affected areas' for these three DMFs. The other amounts represent utilisations or sub-category figures.

Q: What did the CAG identify as the primary reason for creating the 'Common affected areas' category by DMFs in Odisha?

To accommodate ineligible utilisation within prescribed limits, The CAG stated that this new category was not defined in Odisha DMF Rules or PMKKKY guidelines, and its creation was only to accommodate ineligible utilisation within the prescribed 40% limit for indirectly affected areas. This was a deliberate circumvention of rules.

Polity Social IssuesHIGH

Target:UPSC GS-IIMPSCSSC GATeachingPrelims HighMains MediumStatic GK Link

28 Sept 2026

~2 min

Source: The Hindu

Key Data:₹4,541.66 crore₹2,578.73 crore40% limitRule 10(D) Odisha DMF Rules 2015PMKKKYYear ended March 2024

Bodies:Comptroller and Auditor General (CAG)District Mineral Foundation (DMF)Odisha Legislative Assembly

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~2 min · Quick mode

What This Article Covers

1.CAG report on PMKKKY in Odisha flags ₹4,541.66 crore DMF funds sanctioned for 1,114 projects in 'Common affected areas' without rule provision, with ₹2,578.73 crore utilised irregularly.

2.In Keonjhar and Sundargarh, DMFs spent beyond the 40% limit for indirectly affected areas (45.68% and 41.10% respectively) by creating new categories.

3.Only Jajpur DMF identified affected people during 2015-24; others violated Odisha DMF Rules and PMKKKY guidelines.

The Big Picture

Prelims · HighMains · Medium

The CAG report on PMKKKY in Odisha reveals major irregularities in DMF fund utilisation, including exceeding the 40% limit for indirectly affected areas and creation of an undefined 'Common affected areas' category to bypass rules. The failure to identify affected people undermines the scheme's objective.

Exam Lens

Quick Exam Facts From News

Irregular Fund Amount₹4,541.66 Cr sanctioned, ₹2,578.73 Cr utilised without rule provision

Rule Cap (Indirectly Affected)Not more than 40% (Rule 10(D) Odisha DMF Rules, 2015)

Districts Found in ViolationKeonjhar (45.68%), Sundargarh (41.10%), Jajpur (43.54%)

Identification of Affected PeopleOnly Jajpur DMF identified affected people (2015-24)

Audit PeriodYear ended March 2024

1-Minute Revision

›Irregular Fund Amount: ₹4,541.66 Cr sanctioned, ₹2,578.73 Cr utilised without rule provision
›Rule Cap (Indirectly Affected): Not more than 40% (Rule 10(D) Odisha DMF Rules, 2015)
›Target this Data: ₹4,541.66 crore (sanctioned) and ₹2,578.73 crore (utilised) under 'Common affected areas'
›Target this Nodal Body: District Mineral Foundation (DMF) and Comptroller and Auditor General (CAG)
›Target this Legal Point: Rule 10(D) of Odisha DMF Rules, 2015 – 40% cap on indirectly affected areas

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News Snapshot

🏛️

CAG Report on DMF

Major irregularities in utilisation of District Mineral Foundation funds in Odisha unearthed by CAG.

💰

Funds Misallocated

₹4,541.66 crore sanctioned for 'Common affected areas' – a category not defined in Odisha DMF Rules or PMKKKY guidelines.

⚖️

Rule Violations

DMFs exceeded 40% limit for indirectly affected areas and failed to identify affected persons, violating statutory rules.

Detailed Analysis & Strategic Depth

Context / Background

District Mineral Foundations (DMFs) are statutory bodies created under the Mines and Minerals (Development and Regulation) Act, 2015. They collect 30% of royalty from mining operations to fund welfare projects for affected people. The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) provides guidelines for utilisation, mandating identification of directly and indirectly affected persons and limiting spending on indirectly affected areas to 40%.

Core Analysis & Implications

The CAG performance audit for the year ended March 2024 found that DMFs in Keonjhar, Sundargarh, and Jajpur created an undefined 'Common affected areas' category to circumvent the 40% cap. This led to ₹2,578.73 crore spent without rule backing. Moreover, only Jajpur had identified affected people, meaning funds were not reaching intended beneficiaries. Such deviations weaken the redistributive justice objective of mining welfare.

Future Outlook / Way Forward

The CAG report, tabled in the Odisha Legislative Assembly, may prompt state-level corrective measures and stricter compliance with DMF Rules and PMKKKY guidelines. Improved beneficiary identification and transparent fund allocation are essential to ensure long-term sustainable livelihood projects for mining-affected communities.

Key Facts at a Glance

Irregular Fund Amount₹4,541.66 Cr sanctioned, ₹2,578.73 Cr utilised without rule provision

Rule Cap (Indirectly Affected)Not more than 40% (Rule 10(D) Odisha DMF Rules, 2015)

Districts Found in ViolationKeonjhar (45.68%), Sundargarh (41.10%), Jajpur (43.54%)

Identification of Affected PeopleOnly Jajpur DMF identified affected people (2015-24)

Audit PeriodYear ended March 2024

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Practice exam-style questions based on this article.

Q1Static LinkageEasyUPSC, SSC, State PSC

Which constitutional authority conducted the performance audit of PMKKKY in Odisha that unearthed DMF irregularities?

Q2Statement-basedHardUPSC, State PSC

Consider the following statements regarding the CAG report on DMF funds in Odisha:

1. The DMFs of Keonjhar and Sundargarh spent more than 40% of funds on indirectly affected areas.

2. The Odisha DMF Rules, 2015 allow spending up to 60% on indirectly affected areas.

3. Only DMF Jajpur had identified affected people during the period 2015-24.

Which of the statements given above is/are correct?

Q3Data-centricMediumUPSC, SSC, Banking

According to the CAG report, what was the total amount of DMF funds sanctioned for projects in 'Common affected areas' in the three DMFs of Jajpur, Keonjhar, and Sundargarh?

Q4Application/ImpactMediumUPSC, State PSC

What did the CAG identify as the primary reason for creating the 'Common affected areas' category by DMFs in Odisha?

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CAG Flags ₹4,541.66 Cr DMF Irregularities in Odisha; Funds Exceeded Limit for Indirectly Affected Areas

Exam Lens

Quick Exam Facts From News

1-Minute Revision

News Snapshot

CAG Report on DMF

Funds Misallocated

Rule Violations

Detailed Analysis & Strategic Depth

Context / Background

Core Analysis & Implications

Future Outlook / Way Forward

Prelims Flashpoints

Key Facts at a Glance