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State Disaster Response Fund (SDRF)

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The State Disaster Response Fund (SDRF) is the primary fund available with States for disaster response and is constituted under Section 48 of the Disaster Management Act, 2005 (DM Act).

The 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. Besides, for providing immediate relief to the victims of State-specific disaster within the local context, which are not included in the list of the above notified natural calamities, 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. This flexibility is applicable only after the state has listed the natural disasters for inclusion and has notified clear and transparent guidelines for relief, in case such disasters occur.

Any amount spent by the state for such disasters over and above the specified ceiling would have to be borne out of its own resources and it would be subject to the same accounting norms.

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).

The financial assistance from SDRF/NDRF is for providing immediate relief and is not compensation for loss/damage to properties /crops[1]. Further, the provision for disaster preparedness, restoration, reconstruction and mitigation are not a part of SDRF (The DM Act specifies that for such activities a separate fund called Disaster Mitigation Fund has to be constituted). However, 5% of the annual allocation to SDRF can be kept for specified capacity building activities by the states in the area of disaster management.

The norms of assistance, is reviewed comprehensively after the award of successive Finance Commissions, taking into account various factors, including the price rise.

The Disaster Management Act, 2005 mandates that States shall constitute SDRF once the constitution of the State Disaster Management Authority is notified.

Source of Financing SDRF

The hitherto existing calamity relief Fund (CRF) / Disaster Relief Funds with the state Government was renamed as State Disaster Response Fund (SDRF) by the 13th Finance Commission and the balance in the former was merged with SDRF with effect from 1 April 2010.

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[2].

Since financial year 2010-11, the Union Government has been financing the NDRF through the levy of a cess and the SDRF as grants-in-aid. The FC-XIII (Submitted the report in 2009) had recommended differential State shares, with general category States contributing 25 per cent and special category States contributing 10 per cent, and the balance being contributed by the Union Government as grants-in-aid. Even though the FC –XIV (submitted its report in Feb 2015) had recommended 10% contribution for all state Governments, irrespective of being general or special category, the central Government continued with the existing formula of 75:25 for general category states and 90:10 for special category states.

FC- XIV also recommended that in view of the very wide responsibility cast on governments at different levels by the statute, the Union Government should expedite the development and scientific validation of the Hazard Vulnerability Risk Profiles of States based on which future allocations of SDRF could be done.

In the post GST era, with regard to the contribution of states and the centre in SDRF, it has been decided to implement the 14th FC recommendation (para 10.40 of Chapter 10(Vol.-I)) w.e.f 01.04.2018. Accordingly, all states will contribute 10 per cent to the SDRF and rest 90 per cent will be contributed by the Union Government during 2018-19 and 2019-20 as per the recommended allocation by 14th FC. Currently the allocation pattern is 90:10 (center : state).

Features of SDRF


A dedicated fund for calamity relief was first recommended by the 9th Finance Commission (FC-IX; submitted its report in 1990). Prior to this, the Commissions set apart specific amounts under the 'margin money' scheme (which envisaged setting apart specific amounts by states in order to meet the expenditure on relief measures), recommended by the FC-II (submitted its report in 1957) to meet expenditures on relief measures. FC-VI was the first to be given a formal term of reference relating to the financing of relief expenditure. However the existing system was recommended to be continued till the 9th Finance Commission. The FC-IX (submitted its report in 1990) recommended the establishment of a Calamity Relief Fund (CRF) in each State, with 75% contribution by the Union Government and 25% by the State. For calamities of ‘rare severity’, the Union Government was asked to render assistance and support beyond that envisaged in the CRF.

The FC-X (submitted its report in 1995) put in place a formal mechanism and recommended the setting up of a National Fund for Calamity Relief (NFCR) to assist a State affected by a `calamity of rare severity' through contributions from the Union and State Governments. The fund was to be managed by a National Calamity Relief Committee with representation from both the Union and State Governments. The FC-XI modified this and recommended the setting up of a National Calamity Contingency Fund (NCCF) with an initial corpus of Rs. 500 crore. The funds were to be recouped by levying a special surcharge on Central taxes. The FC-XII (submitted its report in 2004) continued with this arrangement.

With the enactment of the Disaster Management Act in 2005 and consequent changes in the design and structure of disaster management, the FC-XIII (submitted its report in 2009) recommended the merger and transfer of NCCF balances, as on 31 March 2010, to the NDRF which was accepted and notified by the Union Government. Thus, based on the recommendations of the FC-XIII, the available balances in the NCCF on 1 April 2010 were merged with the NDRF. Similarly the funds lying with CRF were merged with State Disaster Response Funds.

Present Status

CRF ceased to exist from 1 April 2010 onwards. The SDRF, which has substituted CRF was reconstituted on the basis of 14th Finance Commission's (report submitted in Feb 2015) recommendations on 30 July 2015. The revised norms for assistance from SDRF were issued on 8 April 2015.

1. In fact, life/property /crop insurance is the financial tool to insure people against crop losses or damages to life and property. Government also runs certain micro insurance and crop insurance schemes. Under the insurance schemes claims are paid to only those who insured their crops/property/life and paid premium under any of the notified insurance scheme. Admissible claims are worked out and paid as per the provisions of the respective schemes.

2. The DM Act provides that like state and national level funds, there shall be analogous provision for the district disaster response funds (DDRFs). Presently, there are 660 districts in the country and the Disaster Management Act requires as many DDRFs to be constituted. However, the setting up of DDRFs in each district may, in some cases, lock up funds and lead to a fragmentation of resources across districts. Considering that technology has made it possible to move funds quickly wherever needed, their utility may be limited in States with adequate penetration of technology. The 14th FC was, therefore, in agreement with the views of the FC-XIII that the decision of constituting DDRFs shall best be left to the wisdom of the State Governments, and hence, did not recommend separate grants for the financing of DDRFs.

3. The July 2015 Guidelines specify that central share to the SDRF would be provided only when the state constitutes a state executive committee (SEC) as per Section 20 of the DM Act, with Chief Secretary of the State as its ex-officio Chairperson, for the management of the fund and upon certification that they have put in place the required accounting reforms specified by the central government in this regard.

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