Burnpur (West Bengal), May 10 (IANS): The central government will be setting up a "Foundation" for tribals' development in pockets that have coal mines since the recent coal auctions are expected to bring in huge sums of money, Prime Minister Narendra Modi said here on Sunday.

He said the maximum coal mines are located in forest covers inhabited by tribal people who have been left out of the mainstream development path.

"The tribals were not able to reap any benefit from coal mining. We have decided to create a 'Foundation' in those districts which will receive a part of the royalty from the coal auctions," he said while inaugurating the country's largest blast furnace plant here.

The prime minister said despite the tribal population living in the proximity of the coal mines, which bring in enormous revenue, they are unable to enjoy the benefits of the coal mines.

"The royalty (given to the Foundation) will be used for development of the (tribal) people from those districts to provide various facilities like housing, water, education and others," he said.

Modi referred to his recent meeting with Chhattisgarh Chief Minister Raman Singh to highlight the benefits of the Foundation.

"I recently met the chief minister of Chhattisgarh, who said since crores of rupees will come in as royalty from the mines, the state government will not have to pay from its own exchequer for the development of these (tribal) areas," he said.

Modi said the decision to allot the money from the coal auction to the respective states where the mines are located will lead to development of those states.