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SC calls diversion of disaster funds by Andhra ‘serious’, seeks response by Apr 28

Published on Apr 13, 2022 06:15 PM IST

The order was passed in an application moved by former state legislator Palla Srinivasa Rao, belonging to the Telugu Desam Party (TDP). As the Supreme Court is considering the issue of Covid ex-gratia payment of ₹50,000 to be made out of the SDRF accounts of each state, Rao brought this issue to the notice of the Court as it amounted to diversion of the money meant for Covid-19 relief.

The Supreme Court on Wednesday pulled up the Andhra Pradesh government for diverting funds from the state disaster response fund (SDRF) to finance the state’s subsidy scheme for farmers. (HT PHOTO.)
ByAbraham Thomas

It is a serious matter if funds meant for disaster relief are used for other purposes, said the Supreme Court on Wednesday as it cracked the whip on the Andhra Pradesh government accused of diverting 1100 crore from the state disaster response fund (SDRF) to finance the state’s subsidy scheme for farmers.

A bench of Justices MR Shah and BV Nagarathna stopped the transfer from taking place and restrained the state from utilizing the money if the amount had already been transferred. “This is a very serious issue. The money meant for disaster relief cannot be used for any other purpose,” the bench remarked while issuing notice to the state and placing the matter for further hearing on April 28.

The order was passed in an application moved by former state legislator Palla Srinivasa Rao, belonging to the Telugu Desam Party (TDP). As the Supreme Court is considering the issue of Covid ex-gratia payment of 50,000 to be made out of the SDRF accounts of each state, Rao brought this issue to the notice of the Court as it amounted to diversion of the money meant for Covid-19 relief.

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Rao, who hails from Vishakapatnam, relied on a March 12, 2022 letter written by Union Minister of State for Finance Pankaj Chaudhary to TDP Member of Parliament (MP) Kinjarapu Ram Mohan Naidu giving details of the alleged diversion that was flagged by the comptroller and auditor general (CAG) in its Report on State Finances of Andhra Pradesh for the year ending March 2020 seeking corrective steps to be taken by the state government.

The letter issued by the Finance Ministry stated that the Andhra Pradesh government received an amount of 324.15 crore as central share of SDRF and an amount of 570.91 crore under national disaster response fund (NDRF) from the Centre. From these accounts, an amount of 1100 crore was transferred by the state government to Personal Deposit Account of Commissioner, Directorate of Agriculture towards payment of input subsidy to farmers for Kharif crop as a “gratuitous relief”, the letter said.

“The CAG’s report includes that the state government transferred 1,100 crore to personal deposit account by showing expenditure as Disaster Relief and Rehabilitation in violation of the Appropriation Act,” the application said. The CAG flagged the expenditure as “the state government has transferred the funds from SDRF to Personal Deposit Account without spending on immediate relief.”

Advocate Gaurav Kumar Bansal, the petitioner who filed the PIL that led to the orders on Covid ex-gratia payment, told the Court that this is also in violation of the Disaster Management Act (DMA) of 2005. “This shows how the state is using SDRF funds for issuing freebies,” he said requiring the Court to step in and seek response from the state. Under Section 46 of the Act, the NDRF cannot be used by state as the same should be made available to national executive committee (NEC) for disaster-related purposes.

Additional solicitor general (ASG) Aishwarya Bhati appearing for the Centre supported the application. She assured the Court to get back on any further communication received from the state on this aspect. To ensure, the state does not part with the money, the bench ordered, “In the meantime, the state of Andhra Pradesh is hereby restrained from transferring funds from SDRF to personal deposit funds and if already transferred, the same shall not be utilized for any purpose other than the purpose mentioned in DMA, 2005.”

The application made all the states as parties but the Court issued notice to Andhra Pradesh only. The applicant said, “The respondents (states) are duty bound to utilize the said fund for emergency response, relief and rehabilitation and that too in accordance with the guidelines laid down by Central Government in consultation with the National Authority…. by way of the letter dated March 12 issued by Minister of State for Finance, Government of India, it is crystal clear that state of Andhra Pradesh has acted not only in violation of DMA, 2005 but also acted against the provisions of Appropriation Act.”

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