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Karnataka’s government aims to amend board setup, opening path to Rs. 24,000 crore mining rehab funds

A senior official has attempted to alleviate concerns, asserting that the government’s intention is solely to expedite long-pending projects. The Karnataka state administration is seeking access to a substantial sum of Rs 24,000 crore held by a special purpose vehicle (SPV) vested with financial independence.

In a move that directly contradicts Supreme Court directives, efforts are underway to restructure the Board of Directors (BoD) of the Karnataka Mining Environment Restoration Corporation (KMERC), the entity overseeing the funds. The proposed restructuring includes the inclusion of district in-charge ministers as board members, a step considered in violation of the court’s rulings.

Established in 2014, KMERC operates as an SPV with the mandate to restore and rehabilitate mining-affected districts within Karnataka. The government had previously attempted to diminish the SPV’s authority, but retreated after Supreme Court guidance.

During a recent KMERC review meeting, S S Mallikarjun, the Minister for Mines and Geology, advocated for a board restructuring, proposing that the chief minister assume the role of chairman and ministers be appointed as members.

This proposition would potentially facilitate the appointment of B Nagendra, the minister from Ballari district, who faces allegations in 42 cases including those related to illegal mining. Other district-in-charge ministers, B Z Zameer Ahmed Khan and D Sudhakar, are similarly entangled in serious legal cases, raising concerns about their suitability for board membership.

In 2014, the Supreme Court thwarted the government’s efforts to transform the SPV into a registered society, a move that could have reduced oversight and increased political influence.

The current structure allows the KMERC managing director to approve projects up to Rs 15 crore, while a sub-committee of members has the authority for projects up to Rs 50 crore. Projects exceeding Rs 50 crore require board approval.

The court has stipulated that the SPV should operate as an empowered company with independent financial autonomy. Its finances are to be managed directly without channeling through the state’s consolidated funds.

The involvement of senior officials and the oversight of a retired Supreme Court judge maintain the KMERC’s autonomy. However, proposed changes to the board composition raise concerns about potential conflicts of interest and a deviation from the organization’s original objectives.

The government’s motivation, as claimed by a senior official, is to accelerate projects that have languished for years. The official emphasized that the proposal underwent detailed deliberation, including seeking legal counsel. The advocate general’s opinion is that any changes must be pursued through an appeal to the apex court, considering the court’s stipulations.

SR Hiremath, leader of the activist group Samaj Parivartana Samudaya (SPS), highlighted the KMERC’s responsibility in rectifying the extensive

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