Problem

India's District Mineral Foundation Funds (DMF) were established in 2015 as a benefit-sharing scheme designed for communities affected by mine closures. Non-profit trusts receive a percentage of royalties collected from mining leases, which are then deployed to support  welfare programs and development initiatives in mining-affected areas. 60% of the funds must go to high-priority areas, such as skills development. Despite this legal mandate, state disbursements are not meeting this requirement, leaving critical reskilling programs severely underfunded. 

These implementation gaps also highlight how existing social protection schemes can fail to address the needs of secondary affected stakeholders - groups indirectly impacted by the energy transition, such as: coal transport workers (truck drivers, railway staff) and supply chain-dependent businesses (equipment suppliers, local vendors). Unlike direct employees of mining companies, these stakeholders often lack formal recognition in transition planning, despite facing high  economic risks. These structural barriers  risk leaving thousands of workers without viable pathways as India pursues its renewable energy targets.

Response

To close those gaps, India's Ministry of Skills Development and Entrepreneurship partnered with the Asia Development Bank (ADB) and created the Just Transition Worker Support Facility. It aims to gather and integrate existing resources and institutions that can be leveraged to support workers affected by coal transitions. DMFs are one such resource. This includes integrating  monitoring systems to ensure the funds actually reach the targeted affected stakeholders. As such, these integrated support packages combine reskilling, entrepreneurship programs, and social protections, while expanding coverage to include vulnerable secondary affected stakeholders like coal transport workers.

The Just Transition Worker Support Facility seeks to deploy a pragmatic approach to just transitions financing by utilising existing mechanisms as a means to drive more meaningful engagement and cross-sector partnerships.

Find out more: ADB; IHRB & JTFL