E-Paper
States cannot divert funds meant for disaster purpose, says SC
The Court was informed about the alleged diversion in a matter where the Court was monitoring payment of Covid ex-gratia by states to people who lost their dear ones during the Covid-19 pandemic. The Centre had decided to pay a sum of ₹50,000 for every Covid-19 death and the same was to be disbursed out of the SDRF funds by each state government
The Supreme Court on Monday said that funds meant for disaster relief cannot be diverted by states to other accounts after the Comptroller and Auditor General (CAG) highlighted a grave illegality committed by Andhra Pradesh in diverting a sum of ₹1100 crore out of the state disaster fund and keeping it unutilized for two years.
A bench of justices MR Shah and BV Nagarathna said, “The amount meant for state disaster response fund (SDRF) should be used for that purpose. Even if the money is temporarily diverted, if you are not using for drought relief, the same should be reverted as otherwise this money will not be available to be utilized for disasters.” Giving the state government time to take a decision in this regard, the bench posted the matter to Wednesday.
The Court was informed about the alleged diversion in a matter where the Court was monitoring payment of Covid ex-gratia by states to people who lost their dear ones during the Covid-19 pandemic. The Centre had decided to pay a sum of ₹50,000 for every Covid-19 death and the same was to be disbursed out of the SDRF funds by each state government.
As the amount of ₹1100 crore was substantial, the Court had asked CAG to examine the response of the state government denying allegation of any diversion. The state filed a response in April this year stating that in 2018, a serious drought affected the state and it sought Central aid towards agricultural input subsidy. The Centre sanctioned an amount of ₹900.40 crore of which the first installment of ₹412.14 crore was received in March 2019 and the second installment of ₹488.26 crore in May 2019. Out of this total amount, ₹759.98 crore was earmarked for agriculture input subsidy. But due to model code of conduct that came into operation, the money could not be released.
To ensure this amount is not mis-utilized, the government added an amount of ₹340.02 crore from the SDRF to the said amount of ₹759.98 crore and the total amount of ₹1100 crore was transferred to the personal deposit account of the Commissioner of Agriculture for distribution to the farmers.
Responding to this stand taken by the state, the CAG filed an affidavit last month where it said, “It is clear that funds released from SDRF for relief towards input subsidy for farmers which was transferred to Personal Deposit accounts is still lying unutilized even after lapse of two years. This further indicates that these funds were not utilized for the intended purpose, thus violating the principle of SDRF.”
The bench said, “Suppose there is a fourth Covid wave coming and this this amount ( ₹1100 crore) is to utilized for Covid purposes and you do not have the said money, we cannot visualize what will happen in this situation.”
Senior advocate R Basant appearing for Andhra Pradesh government told the Court, “Every payment towards Covid relief as per the Court’s order has been made. It is not the case of the petitioner that the state did not make the ex-gratia payment. This transaction took place in 2019 while the present petition (seeking Covid ex-gratia) was filed in 2020. We will utilize this money for drought purposes only.”
The bench said that parking SDRF fund in another account in the hope that the same will be spent for drought cannot be accepted. “We cannot permit this as otherwise, every state will do likewise and keep the SDRF amount in different accounts and the same will not be used for disaster purposes,” the bench observed. However, Basant said that he will take instructions and inform the Court about reverting the money back to state disaster fund.
The issue was brought to the Court in an application filed by a former state legislator Palla Srinivasa Rao belonging to the Telugu Desam Party (TDP). He stated that the state received an amount of ₹324.15 crore as central share of state disaster response fund (SDRF) and an amount of ₹570.91 crore under national disaster response fund (NDRF) from the Centre that were diverted into separate accounts.
The state said that though CAG raised concerns in February 2021 regarding the manner in which the amounts were transferred, it had responded to these issues in May last year. “From a perusal of the above, it is evident that there is no diversion of funds as sought to be alleged by the applicant,” Andhra government stated before the top court.
