Centre went back on disaster funding ratio: Odisha finance minister

Niranjan Pujari Odisha Finance - The Federal
Odisha Finance Minister Niranjan Pujari speaks in state Assembly as Chief Minister Naveen Patnaik looks on.

Odisha Finance Minister Niranjan Pujari has lashed out at the Union government for not implementing the 14th Finance Commission’s recommendations regarding the sanction of funds under State Disaster Response Fund (SDRF).

The Minister speaking in the state assembly on Monday (July 29) said that 90:10 sharing pattern between the Centre and the state was not being followed by the government. Rather they were using 75:25 ratio, which was the previous finance commission’s recommendation.

He said that this was made clear in an explanatory memorandum by the Centre, which said that the “previous sharing pattern of 75:25 ratio will continue till implementation of Goods and Service Tax (GST)”.

The 14th Finance Commission recommendations were drafted under the chairmanship of former reserve bank governor YV Reddy and accepted by the Centre in 2015.

According to the Commission, “With regard to disaster relief, the government has decided that the percentage share of the states will continue to be as before, and that the flows will also be of the same order, as in the existing system; and that, once GST is in place, the recommendation of FFC on disaster relief would be implemented in the manner recommended by the Finance Commission.”

It recommended that the states use up to 10% of the funds available under State Disaster Response Fund (SDRF) which it considers to be ‘disaster’ in local context which is not mentioned in the list of disasters of home affairs ministry. Around 20 calamities such as lightning, cloudburst, heatwave, cold wave, heavy rain, cyclone, tsunami, flood are among those that are eligible to get relief under SDRF.

Pujari raised this issue and said the Centre was going back on its terms. He pointed out that the government mentioned 90:10 ratio will be followed after the implementation of GST, but it still is not being followed despite GST implementation since April 2017.

Odisha was first allotted its initial fund in 90:10 ratio for 2018-19 fiscal, but it was arbitrarily revised to 75:25 ratio and funds deducted. Odisha has lost ₹266 crores due to this, he said.

Speaking to The Federal, Prakash Chandra Mohanty, joint secretary of revenue and disaster management department, Odisha, said, “We don’t know why (this is being done). Only the Centre’s Home Ministry can answer why they have suddenly revised the ratio to 75:25 from 90:10. It was mentioned clearly in the FFC recommendations that after implementation of GST, all states’ ratio should be 90:10. GST has been implemented and why they are going back on their words is beyond me.”

The Union government announced in September 2018 that it was raising its contribution to the SDRF to 90% from 75% for all states with effect from April 1, 2018.

Officials of the revenue and disaster management department of the Centre’s home ministry refused to comment on the matter.