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V. Financial Arrangements

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The Scheme and arrangements for financing the relief expenditure in the wake of natural calamities are governed by the recommendations of Finance Commissions appointed by Government of India after every five years.

 

The present scheme, in operation for the period 2000-2005, is based on the recommendations of Eleventh Finance Commission. As per the Scheme, each State has been allocated a certain annual corpus called Calamity Relief Fund (CRF), administered by a State Level Committee, headed by the Chief Secretary of the State Government. 

The corpus is built by annual contributions of the Union Government and the State Governments concerned in the ratio of 3:1. The share of the Union Government is released in two equal installments irrespective of the fact that there is any calamity or not.

   At present, the aggregate accretion in the States' CRF for a period of five years from 2000-2005 amounts to Rs 110,075.90 million against an amount of Rs  63042.0 million for the period 1995-2000.  

 

The Scheme also provides for extending additional assistance to the States, over and above the provisions of CRF, in the event of a natural calamity of severe nature, after following the established procedure.  This provision exists in the form of National Calamity Contingency Fund (NCCF) with an initial corpus of Rs. 5000.00 million  (for 2000-2005) with   the Union Government to supplement the financial resources needed for relief operations. This fund is required to be recouped by levy of a special surcharge on the Central taxes for a limited period.

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