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National Disaster Response Fund

  • 20 Jul 2020
  • 3 min read

Why in News

The Central Government has allowed contributions from any person or institution in the National Disaster Response Fund (NDRF) as per Section 46(1)(b) of the Disaster Management (DM) Act, 2005.

Key Points

  • Formation:
    • National Calamity Contingency Fund (NCCF) was renamed as National Disaster Response Fund (NDRF) with the enactment of the Disaster Management Act in 2005.
    • It is defined in Section 46 of the Disaster Management Act, 2005 (DM Act).
    • It is placed in the “Public Account” of Government of India under “reserve funds not bearing interest“.
      • Public Accounts: It was constituted under Article 266 (2) of the Constitution. It accounts for flows for those transactions where the government is merely acting as a banker eg. provident funds, small savings etc. These funds do not belong to the government and have to be paid back at some time.
      • Expenditures from it are not required to be approved by the Parliament.
  • Role:
    • It is managed by the Central Government for meeting the expenses for emergency response, relief and rehabilitation due to any threatening disaster situation or disaster.
    • It supplements the State Disaster Response Fund (SDRF) in case of a disaster of severe nature, provided adequate funds are not available in the SDRF.
      • SDRF is the primary fund available with the State governments for responses to notified disasters to meet expenditure for providing immediate relief.
      • The Centre contributes 75% of the SDRF allocation for general category States and Union Territories, and 90% for special category States/UTs (northeast States, Sikkim, Uttarakhand, Himachal Pradesh, and Jammu & Kashmir). 
  • Financing: Financed through the levy of a cess on certain items, chargeable to excise and customs duty, and approved annually through the Finance Bill.
    • Currently, a National Calamity Contingent Duty (NCCD) is levied to finance the NDRF and additional budgetary support is provided as and when necessary.
    • NCCD is levied in the case of goods specified in the Seventh Schedule (goods manufactured or produced).
  • Monitoring: Department of Agriculture and Cooperation under the Ministry of Agriculture and Farmer Welfare monitors relief activities for calamities associated with drought, hailstorms, pest attacks and cold wave/frost while rest of the natural calamities are monitored by the Ministry of Home Affairs (MHA).

Source: TH

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