The central government has recently made a decision allowing any individual or institution to make contributions to the National Disaster Response Fund (NDRF) under the provisions of Section 46(1)(b) of the Disaster Management (DM) Act, 2005. This move comes as part of an effort to strengthen the nation’s response to disasters and emergencies.
Formation and Definition
Originally called the National Calamity Contingency Fund (NCCF), the fund was renamed to NDRF upon the enactment of the Disaster Management Act in 2005. As defined in Section 46 of this act, the NDRF is kept within the ‘Public Account’ of the Government of India under the subcategory of ‘reserve funds not bearing interest’.
Nature of Public Accounts
Public Accounts, which were formed in line with Article 266 (2) of the Constitution, serve to manage transactions where the government acts merely as a custodian such as for provident funds and small savings. The funds held in these accounts are not government property and must be repaid eventually. Notably, expenditures from public accounts don’t require parliamentary approval.
The Role of NDRF
Managed by the Central Government, NDRF is specifically tasked with meeting the costs related to emergency response, relief, and rehabilitation during times of disaster or potential disaster situations. It acts as a supplement to the State Disaster Response Fund (SDRF) when there is a severe disaster and the SDRF lacks adequate funds. It’s noteworthy that the SDRF is the main source of funds for state governments to provide immediate relief in the face of notified disasters.
Allocation to SDRF
The Centre contributes to the SDRF: 75% for general category States and Union Territories, and 90% for special category States and Union Territories which include the northeast states, Sikkim, Uttarakhand, Himachal Pradesh, and Jammu & Kashmir.
NDRF Financing
The NDRF is financed primarily through the imposition of a specific levy or cess on certain items susceptible to excise and customs duty. This arrangement is secured annually through the Finance Bill. At present, a National Calamity Contingent Duty (NCCD) is levied to fund the NDRF. In addition, budgetary support is also provided when needed.
Monitoring of NDRF
The Department of Agriculture and Cooperation under the Ministry of Agriculture and Farmer Welfare is responsible for monitoring relief activities tied to calamities such as drought, hailstorms, pest attacks and cold wave/frost. Other types of natural calamities are overseen by the Ministry of Home Affairs (MHA). Furthermore, the Comptroller and Auditor General (CAG) conducts audits of the accounts of NDRF.
Last Modified: February 8, 2024