Permanent Fund proposal submitted to Goa Government

GF letter to Goa Govt & CEC on GMPF & DMF (5.2 MB)

In the 2012 Goa mining case (WP 435 of 2012), the Supreme Court had ordered the setting up of a Goa Iron Ore Permanent Fund on grounds of Intergenerational Equity and Sustainable Development. The Goa Government was tasked with formulating the scheme for the Permanent Fund in consultation with CEC (Central Empowered Committee of the Supreme Court). Subsequently, the MMDR Act was amended by ordinance. The amendment required states to set up District Mineral Foundations (DMF) for the benefit of mining affected persons and areas.

Sesa Goa (now Vedanta) and others challenged the Permanent Fund in the Supreme Court (IA 87, 88 & 90 in WP 435 of 2012) primarily on the grounds that the Permanent Fund duplicates the functions of the DMF and is therefore redundant. During the hearings, the Supreme Court ordered the Goa Government to finalize the DMF and the Permanent Fund schemes.

At the next hearing, after examining the MMDR Amendment, the PMKKKY, the Goa DMF Rules, the Goa Permanent Fund Scheme, the Supreme Court found them all inadequate to meet the requirements of the Permanent Fund order in the 2012 Goa mining case. The Supreme Court then ordered the Goa Government to further revise its Permanent Fund scheme to bring it in line with its judgement in WP 435 of 2012. Goa Foundation was permitted to submit its suggestions to the Government of Goa.

The letter submitted by Goa Foundation is attached. The main letter provides the overview. Annex 1 explains why the PF and DMF are both necessary. Annex 4 (page 46) is the detailed proposal on the Permanent Fund. Some of the key elements of the proposal include

(a) the Permanent Fund should cover all minerals, and be called the Goenchi Mati Future Generations Fund,

(b) it should state that its beneficiaries are the people and especially future generations as they were the owners of the minerals,

(c) all receipts from minerals should be deposited into the Fund as they arise from the sale of the minerals (not difficult as the budget is balanced without mining receipts),

(d) all money recovered from illegal mining be deposited into the Fund (GF conservatively estimates Rs. 65,058 crores is recoverable),

(e) the first use of income is to ensure the principal is fully adjusted for inflation to ensure we don’t indirectly cheat our children,

(f) the only distribution of income is by way of a Citizen’s Dividend as a right of ownership,

(g) constitutional special status (Article 371-I) for the Fund to prevent the state of Goa from mortgaging the Fund,

(h) use of the National Pension Scheme investment management and customer accounting infrastructure, and

(i) best practice control and disclosure systems including annual public meetings on performance.

We solicit comments and suggestions from the public on the design of the Permanent Fund. Do write in to We are also searching for a Campaign manager to lead the ground campaign in Goa. And follow us on Facebook or Twitter.

And don’t forget to tell the CM & Minister for Mines, your MPs and your MLA what you think.

GF letter to Goa Govt & CEC on GMPF & DMF (5.2 MB)