Centre may lift 50% cap on use of State Disaster Response Fund

The government is looking at a proposal to allow states to use more than 50% of the State Disaster Response Fund (SDRF) for Covid-19 containment measures amid a severe second wave, officials familiar with the development said. At present, state governments can use up to 50% of SDRF - the primary fund available with them for responses to notified disasters - for Covidrelated expenses ranging from setting up oxygen generation and storage plants in Covid-19 hospitals to procuring testing kits and PPEs. This ceiling is being “reviewed dynamically so as to take appropriate steps as per the evolving situation”, a home ministry official told ET.

Several states and UTs have urged the Centre to enhance the ceiling up to 70% to meet the growing demands of beds, sample collection and screening facilities, officials said even as the pandemic has claimed thousands of lives due to shortage of oxygen and medical infrastructure. Last week, the home ministry had released Rs 8,873.6 crore in advance to states as the first instalment of the Centre’s share of SDRF. The Centre contributes 75% of SDRF allocation for general category of states and 90% for special category states including the northeastern states, Uttarakhand, Himachal and J&K. The annual central contribution is released in two equal instalments as per the recommendation of the Finance Commission.

For 2021-22, the Centre has allocated Rs 1,288 crore to Maharashtra, Rs 773.20 crore to Uttar Pradesh, Rs 316.40 crore to Karnataka and Rs 125.60 crore to Kerala among others. Normally, the first instalment of SDRF is released in June. But this time, considering the immediate need of states, the government has released SDRF amounts without waiting for the utilisation certificate.