The gap in disaster management funding
Mains Paper: 3 | Disaster Management
Prelims level: Kerala Floods, Disaster Management Act
Mains level: Power tussle between centre and states affecting the funding of disaster management. Critically examine.
- The Centre and the Kerala government on the offer and acceptance of foreign aid following the floods has drawn attention away from the core question at stake one of fiscal federalism.
- The goods and services tax (GST) has increased the centralization of fiscal powers, limiting the autonomy of states to raise their own revenue for public expenditure.
- The interplay of the fledgling GST regime with the role and responsibilities of the Centre and states under the Disaster Management Act, 2005.
- It has led to an uncharted situation.
What are the constitutional contexts
- Public health, roads, bridges and ferries, inland waterways, agriculture and land are state subjects, under List II of the Constitution.
- The Kerala government has sought to impose a cess of 10% to finance the rebuilding of the state following the devastation caused by floods.
- In terms of Article 279A of the Constitution, the GST Council is the forum for approving any new state tax on account of a natural calamity or disaster.
- Given that the taxation powers (and consequently, budgets) of states are significantly constrained on account of GST.
Problems faced by DMA
- This problem is compounded by the lack of fund outlay under the DMA.
- While the DMA, which predates the GST Act, expands the role of the Centre in disaster management, this has not resulted in adequate budgetary apportionment for states.
- The prime minister is the ex-officio chairperson of the National Disaster Management Authority (NDMA), and secretaries of the concerned central government ministries and departments are members of the National
Executive Committee (NEC).
- Similar arrangements are made at the state and district levels.
- The NEC is responsible for formulating the national plan, which the central government is to finance by making “adequate provisions”.
Analysing the current data
- Despite the statutory role of the Centre under the DMA, it places primary responsibility for disaster management on the states.
- According to a PRS legislative research analysis of the demand for grants by the Union ministry of home affairs (MHA) in 2017-18.
- It’s roughly 80% of the MHA’s budget expenditure went to the police, while only 6% was spent on disaster management, rehabilitation of refugees and migrants, census and Cabinet expenses, put together.
- The SDRF is the primary means available to the states of financing disaster relief and response.
- The Centre contributes 75% of the SDRF for general category states and 90% to special category states.
- Thus, its total budgeted expenditure for the entire country for 2018-19 was ₹12,500 crore. Compare this to Assocham’s estimates of the loss suffered by Kerala alone, at ₹15,000-20,000 crore.
- As per the operational guidelines for the NDRF, the fund is intended only to provide immediate relief to disaster victims.
- Neither the NDRF nor the SDRF can be used for restoration or reconstruction in the aftermath of a disaster.
- These expenses are to be met from normal budgetary heads or plan funds.
- In 2016, the Centre decided not to establish a mitigation fund, finding that these expenses could be met through its other schemes.
- The GST Council has now been asked to determine whether Kerala can raise revenues through a disaster cess.
- If the council finds that such a cess will destroy the uniformity of tax rates across the country, the Centre must step in with additional disaster relief to prevent excessive borrowing by the state and the makings of another disaster.
UPSC Prelims Questions:
Q.1) Which of the following statements is/are correct about National disaster response force?
1. The parent agency of National Disaster Management Authority is Ministry of Home Affairs.
2. The Chairman of the NDMA is Home Minister.
a. Only 1
b. Only 2
ANSWER: Only 1
- The Chairman of the NDMA is the Prime Minister.
- During ‘calamities of severe nature’, the Central Government is responsible for providing aid and assistance to the affected state.
- The aid include deployment of Armed Forces, Central Paramilitary Forces, National Disaster Response Force (NDRF) at the State’s request.
UPSC Mains Questions:
Q.1) Power tussle between centre and states affecting the funding of disaster management. Critically examine.