Why in News? Advance release of funds from SDRF to State Governments of Andhra Pradesh, Odisha, Tamil Nadu and West Bengal.

About State Disaster Response Fund (SDRF):

• SDRF has been constituted by each state under the provisions of Disaster Management act 2005.
• It was constituted based on the recommendations of the 13th Finance Commission.
• Funding: The government of India contributes 75% and 90% of the total yearly allocation of SDRF to general states and special category states respectively.
• Heads: The state executive committee headed by the Chief Secretary is authorized to decide on all matters relating to the financing of the relief expenditure from the SDRF.

Disaster (s) covered under SDRF: Cyclone, drought, earthquake, fire, flood, tsunami, hailstorm, landslide, avalanche, cloudburst, pest attack, frost and cold waves.

Local Disaster: A State Government may use up to 10 percent of the funds available under the SDRF for providing immediate relief to the victims of natural disasters that they consider to be ‘disasters’ within the local context in the State and which are not included in the notified list of disasters of the Ministry of Home Affairs subject to the condition that the State Government has listed the State specific natural disasters and notified clear and transparent norms and guidelines for such disasters with the approval of the State Authority, i.e., the State Executive Authority (SEC).

Features of SDRF:

• SDRF is located in the ‘Public Account’ under ‘Reserve Fund’. (But direct expenditures are not made from Public Account.)
• State Government has to pay interest on a half yearly basis to the funds in SDRF, at the rate applicable to overdrafts.
• The aggregate size of the SDRF for each state, for each year, is as per the recommendations of the Finance Commission.
• The share of GoI to the SDRF is treated as a ‘grant in aid’.
• Ministry of Home Affairs (MHA) can recommend an earlier release of 25% of the central share due to a state in the following year, if the exigencies of the particular calamity so warrants. This advance release is adjusted against future instalments due from the center.
• The accretions to the SDRF together with the income earned on investment are to be invested in central government securities or in interest earning deposits with banks, which when needed are liquidated.
• The financing of relief measures out of SDRF are decided by the State Executive Committee (SEC) constituted under Section 20 of the DM Act. SEC is responsible for the overall administration of the SDRF. However, the administrative expenses of SEC are borne by the State Government from its normal budgetary provisions and not from the SDRF or NDRF.
• The norms regarding the amount to be incurred on each approved item of expenditure (type of disaster) are fixed by the Ministry of Home Affairs with the concurrence of Ministry of Finance. Any excess expenditure has to be borne out of the budget of the state government.
• In the wake of natural calamities, a state Government is empowered to undertake necessary relief measures from SDRF, which is readily available with them. If additional financial assistance is required from National Disaster Response Fund ((NDRF) they have to submit a memorandum for the same and in the mean time utilize contingency fund of the State, if SDRF is exhausted.
• Ministry of Home Affairs is the nodal ministry for overseeing the operation of the SDRF and monitors compliance with prescribed processes.
• Comptroller and Auditor General of India (CAG) audit the SDRF every year.