A proposed solution involving the States Premium

A DMK MP is seeking to redraw the framework for disbursal of disaster relief funds

The disbursal of funds by the Union government to help States tackle the devastation caused by natural disasters continues to be mired in controversy. Tamil Nadu had urged the Union government to release ₹6,675 crore under the National Disaster Response Fund (NDRF) so that the State can carry out the relief and restoration work required after Cyclone Fengal affected 14 districts, claimed 40 lives, and caused widespread destruction in the State last December. This demand was not heeded in the Union Budget.

In the past couple of years, Tamil Nadu has been facing back-to-back disasters, starting from Cyclone Michaung and floods in the southern districts in December 2023. “The intensity and frequency of these weather systems have significantly increased, with some areas receiving an entire year’s rainfall within 24 hours. Despite the State’s best efforts in planning and preparation, these climatic anomalies result in considerable economic strain, draining the State’s exchequer. The funds under the State Disaster Response Fund (SDRF) have proven inadequate to meet the immediate relief and long-term restoration needs,” the State Finance Minister, Thangam Thennarasu, had said at a meeting held before the presentation of the Union Budget.

The Centre had earlier released ₹944 crore, but Mr. Thennarasu contended that this was only a delayed disbursal of the Union government’s regular 75% share of the SDRF. He said that the Union government had released “nothing under the NDRF”, as sought by the Tamil Nadu government in the aftermath of Cyclone Fengal. Previously, the Centre had responded to the State’s requirement of ₹37,907 crore after Cyclone Michaung by disbursing just ₹276 crore.

Union Finance Minister Nirmala Sitharaman has denied that step-motherly treatment is being meted out to Tamil Nadu. She argued that the 14th Finance Commission had created a formula for allocating funds through the NDRF and SDRF. “The Central government cannot tweak it in favour of or against any State. The Finance Commission made it an institutional arrangement for States to receive funds upfront for disaster relief,” she pointed out.

Against the backdrop of this conflict between the Centre and States, particularly those ruled by parties that are not part of the National Democratic Alliance, DMK Rajya Sabha MP, P. Wilson, has moved a Bill to amend the Disaster Management Act, 2005, seeking to tweak its structure and composition. The Disaster Management (Amendment) Bill, 2024, seeks to replace the National Disaster Management Authority with a National Disaster Management Council (NDMC). It proposes that the NDMC be chaired by the Prime Minister or a nominated Minister, with each State government nominating a Minister as a member. To ensure balance in its decisions, the Bill has proposed the requirement of a simple majority, with the Prime Minister or his/her nominee getting 15% of the total votes, while the remaining 85% is distributed among State representatives based on their representation in the Council of States (i.e. Rajya Sabha). To illustrate, if a State has 10% of the total seats of the Council of States, then its respective vote in the Council shall be worth 8.5% of the total vote of the National Council. The proposed NDMC will set guidelines for the NDRF to ensure fair distribution of emergency funds and timely decision on the disbursal of funds.

According to Mr. Wilson, the amendment aims to ensure that “there is a structured, transparent, and equitable mechanism for the allocation and utilisation of funds dedicated to disaster management,” thereby ensuring that States severely affected by disasters are not left underfunded or neglected. Such a NDMC would prioritise funding based on the severity of disaster impact and the urgent needs of affected States.

Although Mr. Wilson’s proposed legislation is only a Private Member’s Bill and its broad contours would require wider debate and fine-tuning, it is bound to find resonance among elected representatives from States which, like Tamil Nadu, believe that there is a gap between the disaster relief funds they expect and the actual amount disbursed by the Centre. It is worth noting here that last year, Karnataka and Tamil Nadu had knocked on the doors of the Supreme Court seeking a direction to the Centre to release funds sought by them to tide over natural calamities.