Relevance: GS Paper III
Source
Disaster Management
Origin of State Disaster Response Fund (SDRF)
Over the years, finance commissions have provided guidelines to the central government on assisting the state governments in providing relief to disaster-affected communities. It began with the margin money prescription by the Second Finance Commission, which was modified into the Calamity Relief Fund by the Ninth Finance Commission, and further evolved into the current State Disaster Response Fund.
Issues with disaster relief financing
- The mode of computing the quantum of allocation to SDRFs has led to some states receiving less than their deserved allocations. Some states are more vulnerable to certain disasters than others. However, the SDRF allocations made by the Fourteenth FC do not take this into account.
- For instance, AP was given just 4% (₹ 2,430 crore) of the total SDRF allocation after division, which was less than half of what used to receive when undivided.
- On the other hand, Telangana, the newly formed state out of AP, was given ₹ 1,514 crore, an amount almost comparable to the SDRF allocation of Karnataka, despite the former having significant exposure to drought only in contrast to a more complex profile of disaster vulnerability of Karnataka.
- Financing Disaster Relief Disaster management and relief measures for natural calamities figure neither in the union and state lists, nor in the concurrent list. Hence, by default, it becomes the responsibility of the centre. However, in practice, this responsibility has been vested with the states.
Recommendations to improve Disaster Relief
- The Second FC came up with the innovative recommendation to allocate margin money as a separate fund to provide relief to communities affected by disasters. The quantum of this fund was to be calculated by averaging annual expenditure over the previous decade.
- The Seventh FC further recommended that, though the quantum of margin money should be sufficient to meet the disaster relief expenditure of a state, in the event of a severe calamity, the central government could extend assistance beyond the scheme.
- The Ninth FC recommended an alternate system of relief funding: a Calamity Relief Fund (CRF) for each state, with 75% of its funds coming from the central government and 25% from the state concerned. The quantum of allocation would be calculated based on the average of the actual ceiling of expenditure over the previous 10 years.
- The Tenth FC further recommended the setting up of a National Fund for Calamity Relief (NFCR) with a corpus of ₹ 700 crore to assist any state affected by a calamity of rare severity. It suggested that such calamities would have to be adjudged on a case-by-case basis. The management of this fund was to be under a national calamity relief committee chaired by the union minister for agriculture.
- The Eleventh FC suggested that a multidisciplinary group of 200–300 skilled professionals in each state and a team of about 3,000–4,000 trained personnel at the national level be kept in readiness to respond to disasters. It also recommended the setting up of a National Calamity Contingency Fund (NCCF), in place of the NFCR, with an initial corpus of ₹ 500 crore, which was to be recouped through the levy of a special surcharge on central taxes. The NCCF would function in addition to the CRFs.
- The Disaster Management Act, 2005 provided for effective management of disasters, including mechanisms for funding disaster relief and response. The act envisaged the creation of two types of funds, one for disaster response and the other for mitigation at three different levels: national, state, and district.
- The Twelfth FC extended the list of calamities to cover landslides, avalanches, cloud bursts, and pest attacks. It also recommended the continuation of the NCCF scheme in its existing form.
- Aligning with the Disaster Management Act of 2005, the Thirteenth FC recommended the creation of the NDRF and the renaming of the CRFs as SDRFs.
- The Fourteenth FC adopted the recommendations of Thirteenth FC for contributions from both the centre and the states for the NDRF.
Conclusion
The Finance Commission should pay close attention to the various issues to ensure effective disaster management and enable state governments to move towards disaster risk reduction.
