Context: Home Ministry approves release of Rs 11,092 crores under State Disaster Risk Management Fund to All States. The State Disaster Response Fund (SDRF) is the primary fund available with States for disaster response.
The Central Government has released in advance its share of first installment of State Disaster Risk Management Fund for the year 2020-21. The fund amounts to Rs. 11,092 crores, with a view to augment funds available with the State Governments.
To make available additional funds to the State Governments for taking preventive and mitigation measures for containment of COVID-19, Central Government on 14.03.2020 has already made a special dispensation for utilization of State Disaster Response Fund (SDRF).
WHAT IS STATE DISASTER RESPONSE FUND?
The State Disaster Response Fund (SDRF) is the primary fund available with States for disaster response. It is constituted under Section 48 of the Disaster Management Act, 2005.
The SDRF, which has substituted Calamity Relief Fund was reconstituted on the basis of 14th Finance Commission’s (report submitted in Feb 2015) recommendations.
SDRF is used for meeting expenditures for providing immediate relief to the victims of cyclone, drought, earthquake, fire, flood, tsunami, hailstorm, landslide, avalanche, cloud burst, pest attack, and frost and cold wave. But this time, Fund was allowed to be utilized for:
- Setting up quarantine facilities.
- Sample collection and screening.
- Setting up additional testing laboratories, cost of consumables.
- Purchase of personal protection equipments for healthcare, municipal, police and fire authorities.
- Purchase of thermal scanners, ventilators, air purifiers, and consumables for Government hospitals.
To meet the State-specific disasters, Ministry of Home Affairs has authorized the State Governments to incur an expenditure of 10% of funds available under SDRF, subject to the procedures laid down therein.
If the amount available under the SDRF is not sufficient, states can request for making available assistance from a similar fund managed by the central Government – National Disaster Response Fund (NDRF).
SOURCE OF FUNDING OF STATE DISASTER RESPONSE FUND
While the DM Act clearly provides two sources of financing the NDRF, no source has been laid down for the SDRF.
It is implied that the corpus of the SDRF will be the grant recommended by the Finance Commission (FC) under Article 275 (1) of the Constitution.
Thus, financing of the SDRF is based on the recommendations of the Finance Commissions, which determine the annual size of the Funds as well as the respective contributions of the Union and State Governments.
FEATURES OF SDRF
- SDRF is located in the ‘Public Account’ under ‘Reserve Fund’.
- State Government has to pay interest on a half yearly basis to the funds in SDRF, at the rate applicable to overdrafts.
- Currently the allocation pattern is 90:10 (center : state) for all states.
- If the state government delays its contribution (from 15 days), interest rate at the rate of bank rate will have to be paid for the number of days of delay.
- The share of GoI to the SDRF is treated as a ‘grant in aid’.
- Ministry of Home Affairs (MHA) can recommend an earlier release of 25% of the central share due to a state in the following year, if the exigencies of the particular calamity so warrants. This advance release is adjusted against future instalments due from the center.
- The financing of relief measures out of SDRF are decided by the State Executive Committee (SEC) constituted under Section 20 of the DM Act.
- Ministry of Home Affairs is the nodal ministry for overseeing the operation of the SDRF.
- Comptroller and Auditor General of India (CAG) audit the SDRF every year.
- State Government has to furnish to Ministry of Home Affairs twice in a year –in the months of April and October– the details of amount credited to SDRF along with the expenditures incurred and balance available.
- Further, an Annual Report has to be submitted in September based on which the December installment of the central government is released.
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