CAG Flags Diversion of Odisha DMF Funds and Irregularities in Audit
The Comptroller and Auditor General (CAG) of India just dropped a draft audit report, and it’s alarming. The CAG found widespread financial irregularities and systematic misuse of District Mineral Foundation (DMF) funds in Odisha between 2014-15 and 2023-24. Odisha’s DMF collections are massive—over ₹31,324 crore by mid-2025, the highest in the country—but the audit (by business standard) makes it clear: the people supposed to benefit, those living in mining-affected communities, didn’t see much of it. Instead, funds got tangled up in administrative shortcuts and unauthorized spending.
Take Keonjhar, for example. It’s the district with the biggest DMF stash, ₹13,154.67 crore. But the audit points out that 1,730 projects worth ₹2,984.28 crore rolled out in scheduled areas never got the required nod / approval from Gram Sabhas. There’s more trouble: the Board of Trustees approved 2,512 projects, but the collector pushed through 3,269—so 757 projects, amounting to ₹9,733.37 crore, launched without any real authorization.
The report digs deeper, showing that a chunk of the money was pulled away from those who actually needed it. In Keonjhar and Sundargarh, ₹983.32 crore went to 976 villages that had nothing to do with mining—while 488 directly affected and 96 indirectly affected villages didn’t get any project benefits at all. In Jajpur district, 43.54% of funds ended up in indirectly affected areas (over the 40% cap), and only 36.6% went where it was supposed to—directly affected villages, which should have received 60%.
Several high-profile moves caught the CAG’s eye, too. For instance, ₹136.77 crore was channeled into building an international hockey stadium in Rourkela. The CAG called it out—this isn’t “common infrastructure” for mining communities, and the rules don’t recognize it. Another ₹168.15 crore funded school furniture across Keonjhar, Jajpur, and Mayurbhanj, completely against the guidelines set by Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY).
It gets worse: the fund lost more money from operational hiccups. In Keonjhar, an ₹11.26 crore investment in school hostels and furniture just sat unused because of staffing shortages. Skill development programs in Jajpur and Keonjhar fell way short of their job targets, even after crores spent. And on top of that, Sundargarh and Keonjhar districts paid ₹43.79 crore extra to contractual doctors and specialists by ignoring the government salary limits.
