CAG Questions ₹59.13 Crore DMF Spending on PPE Kits in Sundargarh

The Comptroller and Auditor General of India (CAG) has raised serious objections to the expenditure of ₹59.13 crore from the District Mineral Foundation (DMF) fund in Odisha’s Sundargarh district for supplying personal protective equipment (PPE) kits and other materials to workers in mining and industrial areas.
According to the latest CAG report, the expenditure covered 44,120 workers between November 2021 and December 2023. The audit found that the spending was not in accordance with the Odisha District Mineral Foundation Rules, 2015.
The initiative was undertaken following a decision by the then Sundargarh Collector, who also served as chairman and managing trustee of the DMF. A tender process was initiated in June 2021, and the tender committee fixed the price of a PPE kit at ₹13,400 before authorising three suppliers.
The CAG noted that in September 2021, the Collector approved a proposal for one vendor to provide PPE kits to 14,050 workers at a cost of ₹18.83 crore. However, the formal approval for the project was granted much later, during the 10th meeting of the DMF Board of Trust on August 31, 2023.
The audit also questioned the decision to use DMF resources for providing safety equipment that, under Section 7A(1) of the Factories Act, 1948, should generally be ensured by employers in the mining and industrial sectors. The CAG observed that instead of enforcing the statutory responsibility of companies, the district administration took up the expenditure through the DMF.
The government had earlier told the CAG that the expenditure was made in the interest of workers living in mining-affected areas. However, the auditor concluded that the spending violated the provisions governing the use of DMF funds.

RTI activist and Congress leader Rashmi Ranjan Padhi, who had earlier raised allegations regarding the expenditure, said the CAG findings support his claims. Citing RTI documents, Padhi alleged that the initial tender floated on June 9, 2021, was intended to cover 10,000 mining workers.
According to him, Geelon Industries Pvt Ltd emerged as the lowest bidder with a quoted price of ₹13,500 per kit, followed by Veer Enterprises and Shree Hari General Supplier. He alleged that the beneficiary count was later expanded to 14,050 and subsequently to 24,139 workers without fresh tenders.
Padhi claimed that by mid-2022, Geelon Industries had supplied kits to 14,042 workers for ₹18.82 crore, while Veer Enterprises supplied kits to 7,062 workers for ₹9.46 crore and Shree Hari supplied kits to 3,025 workers for ₹4.05 crore, taking the total expenditure to ₹32.33 crore at that stage.
He further alleged that the actual market value of a kit was around ₹8,000 against the approved price of ₹13,500 and claimed that the resulting difference amounted to nearly ₹12 crore. These allegations are separate from the CAG’s finding regarding the overall ₹59.13 crore expenditure.
Padhi also alleged that the project was implemented hastily in April 2022 and demanded that the amount be recovered from the two former Sundargarh collectors whom he held responsible for the alleged irregularities.