Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

[op-ed snap] The gap in disaster management fundingop-ed snap


Mains Paper 3: Disaster Management | Disaster & disaster management

From UPSC perspective, the following things are important:

Prelims level: NDMA, NDRF, SDRF,

Mains level: Need of post-disaster funds for adequate mitigation and rehabilitation of affected population


Debate on post-disaster funds

  1. The debate between 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
  2. 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
  3. The interplay of the fledgling GST regime with the role and responsibilities of the Centre and states under the Disaster Management Act, 2005, (DMA) has led to an uncharted situation

Fiscal domain of states

  1. Public health, roads, bridges and ferries, inland waterways, agriculture and land are state subjects, under List II of the Constitution
  2. The Kerala government has sought to impose a cess of 10% to finance the rebuilding of the state following the devastation caused by floods
  3. 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

Need for more finance devolution

  1. Given that the taxation powers (and consequently, budgets) of states are significantly constrained on account of GST, it is incumbent on the Centre to share the states’ burdens in times of crisis
  2. Previously, states received 60% of all indirect taxes, while the Centre received 40%. This has now changed to a 50-50 division, even though the Centre forgoes cesses
  3. The GST is believed to increase state revenue in the long term, but, at the moment, several states, including Kerala, have reported a significant reduction in tax revenues under the new tax regime
  4. State governments have increased expenditure responsibilities (on account of the Ujwal Discom Assurance Yojana scheme, pay revisions and farm loan waivers)—more so in times of crises
  5. Without an adequate share of taxes, they are pushed to borrow more, hardly a sustainable source of financing public expenditure

Ignorance of state demands as well as DMA

  1. The DMA, which predates the GST Act, expands the role of the Centre in disaster management, but this has not resulted in adequate budgetary apportionment for states
  2. 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)
  3. The NEC is responsible for formulating the national plan, which the central government is to finance by making “adequate provisions”
  4. Despite the statutory role of the Centre under the DMA, it places primary responsibility for disaster management on the states

Post-disaster mitigation has no specific funds

  1. The state disaster response fund (SDRF) is the primary means available to the states of financing disaster relief and response
  2. As per the operational guidelines for the national disaster response fund (NDRF), the fund is intended only to provide immediate relief to disaster victims
  3. Neither the NDRF nor the SDRF can be used for restoration or reconstruction in the aftermath of a disaster
  4. These expenses are to be met from normal budgetary heads or plan funds

Inadequate resources available for mitigation

  1. The Centre contributes 75% of the SDRF for general category states and 90% to special category states
  2. The total budgeted expenditure for the entire country for 2018-19 was ₹12,500 crore
  3. Assocham estimates the loss suffered by Kerala alone, at ₹15,000-20,000 crore

Way Forward

  1. By concentrating taxing power, the 122nd amendment to the Constitution has tilted the balance of federal powers towards the Centre
  2. It is not unreasonable for states to expect that the Centre will extend financial support during disasters
  3. The Centre must step in with additional disaster relief to prevent excessive borrowing by the state and the makings of another disaster
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