CRF Scheme 2000-05

No. 43(1)PF.I/2000

Government of India Ministry of Finance Department of Expenditure Plan Finance-I Division

New Delhi, the 24^th November 2000

To

The Chief Secretary

Government of

Sub: “Scheme for constitution and Administration of the Calamity Relief Fund and Investments therefrom” based on the recommendations of the Eleventh Finance Commission in its Report relating to calamity relief for 2000-05.

Sir,

I am directed to state that the Schemes for Constitution and Administration of the Calamity Relief Fund and Investments therefrom circulated vide this Ministry’s letter No. 4391)PF.I/95 dated 27^th July 1995 was valid for the period 1995-2000. The Eleventh Finance Commissioner (EFC) was required to review this scheme of Calamity Relief Fund (CRF) and to make appropriate recommendations thereon. The EFC accordingly, reviewed the existing scheme of CRF keeping in view the suggestions made by the State Government, Ministry of Agriculture and this Ministry and has recommended for the continuation of the scheme of CRF with certain modifications. The recommendations of the EFC in this regard were accepted by the Government of India.

2. In accordance with the recommendations of the EFC and after consultation with the State Governments, Reserve Bank of India, Controller General of Accounts, Comptroller and Auditor General of India and Ministry of Agriculture, a revised “Scheme for Constitution and Administration of the Calamity Relief Fund and Investments therefrom” has been prepared. A copy of the same is enclosed for necessary action. The Scheme is deemed to have come into force w.e.f. 1^st April 2000.

3. The balance of Center’s share of CRF for the current year (2000-01) will be released to the State Government only after fulfillment of the conditions laid down in para 6 of the Scheme. You are, therefore, requested to kindly take necessary action in the matter immediately so that release of Centre’s share of CRF could be considered by this Ministry.

4. A copy of the Hindi version of the scheme is also enclosed.

1. The receipt of this letter may kindly be acknowledged.

Sd/-R.Bannerji

Jt Secy to Govt of India

Scheme for Constitution and Administration of the Calamity Relief Fund and Investments therefrom.

1. Title of the scheme- The scheme shall be called “Calamity Relief Fund Scheme.

2. Period of Operation- It shall come into force with effect from the financial year 2000-01 and will be operative till the end of the financial year 2004-05.

3. Calamities covered under the Scheme- The CRF should be used for meeting the expenditure for providing immediate relief to the victims of cyclone, drought, earthquake, fire, flood and hailstorm.

4. Constitution of Calamity Relief Fund – A “Calamity Relief Fund” (hereinafter referred to as ‘the fund’) for the purpose of financing natural calamity relief assistance. The fund would be constituted in the Public Account and classified under the head “8235-General and Other Reserve Funds-111 Calamity Relief Fund” in the accounts of the Government concerned. However, if for some reason it is not possible to invest the fund in a manner prescribed in para 9 of the scheme, it should be classified under the head “8121-General and Other Reserve Funds” in the interest bearing section of the Public Account, under a distinct minor head.

5.1 Contributions to the Fund- The amount of annual contribution to the Calamity Relief Fund of each State for each of the financial years 2000-01 to 2004-05 would be as indicated in Annexure-I to this scheme. Of the total contribution indicated, Government of India will contribute 75% of the total yearly allocation in the form of a non plan grant and the balance amount will be contributed by the State Government concerned. The yearly share of the Govt of India and the State Govt are shown in the Annexures-II and III respectively. In respect of successor States of Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Uttar Pradesh, and Uttaranchal and information is as shown in Annexure-IV.

5.2 The share of the Government of India to the Fund shall be paid to the State Govt as Grants-in-aid and accounted in the Govt of India accounts under the head ‘3601-Grants-in-aid to State Government-01 Non Plan grants-109 Grants towards contribution to Calamity Relief Fund’. The State Govt shall take these as receipts in their budget and account under the head ‘1601-Grants-in-aid from Central Government-01 Non Plan Grant-109 Grants towards contribution to Calamity Relief Fund’.

5.3 In order to enable transfer of the total amount of contribution, to the Fund (including the state’s share of contribution), the State Governments would make suitable Budget provision on the expenditure side of their budget under the head “2245-Relief on Account of Natural Calamities-05 Calamity Relief Fund-101 Transfer to Reserve Fund and Deposit Accounts- Calamity Relief Fund”.

5.4 The share of the Central Government shall be remitted to the State Government in two instalments on Ist May and Ist November in each Financial year. Likewise, the State govt shall also transfer the total contribution (including State’s share) to the Fund in two instalments in May and November of the same year. The arrears of first instalment for the financial year 2000-01 will be paid / transferred by the Governments concerned immediately. Wherever the contribution has already been released / transferred by the Central / State Government, suitable accounting adjustments may be carried out in accordance with the provisions of this scheme.

6. Release of Central Contribution to the fund- The share of the Government of India to the Fund due in a year shall be released to the State Governments subject to the following conditions :

1. A ‘Calamity Relief Fund’ has been duly constituted by the State Government in the manner prescribed in para 4 above. The creation of the fund duly certified by the Accountant General (A&E) of the State be furnished by the State Government to the Ministry of Finance.
2. Before an instalment is released, the State Government shall furnish a certificate to the Ministry of Finance indicating that the amount received earlier has been credited to the Fund along with the State’s share of contribution, accompanied by a statement giving the upto date expenditure and the balance amount available in the CRF. This statement itself shall be treated as utilisation certificate.
3. Centre’s contribution due on Ist November shall be released only after the ‘Annual Report on Natural Calamities’ as indicated in para 11.2 of the scheme is received by the Ministry of Agriculture who in turn will communicate the same to Ministry of Finance.
4. The release of both the instalments shall be made by Ministry of Finance subject to the above conditions being satisfied unless advised by Ministry of Agriculture for withholding of release to any State.
5. The State shall be able to draw 25% of the funds due to the State in the following year from the Centre to be adjusted against the dues of the subsequent year.

7. Relationship of Fund with General Revenues/Public Account- The periodic contributions to the Fund as well as the other income of the Fund shall be kept outside the Public Accounts of the States and invested in the manner prescribed in the scheme. However, if for some reason it is not possible to invest in the manner prescribed in the scheme, it should be kept in the Public Account on which the State Government should pay interest to the Fund at one and half times the rate applicable to overdrafts under Overdraft Regulation Scheme of the RBI. The interest will be credited on a half yearly basis.

8.1 State Level Committee- A State Level Committee (hereinafter referred to as ‘the Committee’) shall be constituted by the State Government to administer the Fund, by issue of a suitable notification in this behalf.

8.2 Composition of State Level Committees- The Chief Secretary of the State shall be the ex-officio Chairman of the Committee. The Committee would consist of officials who are normally connected with relief work and experts in various fields in the State affected by natural calamities. The Committee will be nominated by the State Government.

8.3 Sub Committee- The State Governments and/or the State level Committees may constitute sub committees as may be considered necessary by them in connection with the work of the Committee.

8.4 Functions of the State Level Committee- The Committee will decide on all matters connected with the financing of the relief expenditure.

8.5 The Committee will arrange to obtain the contributions from the concerned Governments, administer the Fund and invest the accretions to the Fund as per the norms approved by the Government of India from time to time. The norms of investment are indicated in para 9.3.

8.6 The Committee shall also be responsible to ensure that the money drawn from the calamity Relief Fund is applied for the purposes for which the Fund has been set up and only on items of expenditure and as per norms contained in the guidelines issued by Ministry of Agriculture.

8.7 The accretions to the Fund together with the income earned on the investments of the Fund will be used by the Committee to meet items of expenditure covered by the norms contained in the guidelines issued by the Ministry of Agriculture. No further financial assistance (beyond the Central Government’s yearly contribution to the Fund) will ordinarily be available for the purpose.

8.8 Expenditure of Committee- All administrative and miscellaneous expenses of the Committee shall be borne by the State Government under its normal budgetary provisions and not from the CRF.

9.1 Administration of the Fund –As stated in paragraph 8.1 above, the responsibility for the administration of the Fund will rest with the Committee.

9.2 On receipt of the amounts of contributions from the Government, the Committee would take action for investment of the funds as per the prescribed norms. The investment of the funds shall be carried out by the branch of the Reserve Bank of India (having Banking Department) at headquarters of the State. In the case of States in which there is no such branch of the Reserve Bank of India at the State Headquarter, the investments shall be carried out by the bank designated by RBI. In the case of Government of Jammu & Kashmir and Sikkim these functions shall be carried out by their bankers.

9.3 Pattern of Investment from the Fund- The accretions to the Fund together with the income earned on the investment of the Fund shall, till contrary instructions are issued by Government of India under para 8.5, be invested in one or more of the following instruments :

(a) Central Government dated Securities;

1. Auctioned Treasury Bills
2. Interest earning deposits and certificates of deposits with Scheduled Commercial Banks;
3. Interest earning deposits in Co-operative Banks;

9.4 Account of Investment Transactions – The committee will, from time to time, issue instructions to the concerned local bankers indicated in para 9.2 above to invest specified amount(s) from the Fund in the securities specified in clauses (a) to (d) under paragraph 9.3. Such instructions will be issued by the Chairman and any one of the members of the Committee. The banks will immediately arrange to make the necessary investment locally or through their branches/correspondent banks / RBI at Bombay or other metropolitan centres. The banks would scroll to the Government the debit on account of the investment and other incidental charges like brokerage, commission etc. in the usual course. However, in order to ensure that the investment transactions of the Fund do not get mixed up with other transactions these may be indicated distinctly in separate scrolls.

On receipt of the scrolls the investment transactions would be accounted for under the head “8235-General and Other Reserve Fund-112 Calamity Relief Fund Investment Account.” However, the incidental charges like brokerage, commission etc. shall be accounted for as a charge on the Fund.

9.5 As far as practicable, the investment in the dated securities of the Central Government should be made in their new issues, that is to say, at the time when they are offered for subscription to the public.

9.6 The bank will arrange to collect interest on these securities /bonds and credit the same to the account of the Government on the due date. These receipts shall form a part of the receipts of the Fund and would be accounted for as such. Further, these would require to be invested by the Committee as in the case of the contributions by the Government i.e. in accordance with the investment norms prescribed in para 9.3 above. On maturity of the securities, the proceeds will be collected and credited to the account of the Government or reinvested on the basis of instructions received from the Committee. As in the case of the debit scrolls the banks shall use separate scrolls for the receipts.

9.7 On receipt of instructions from the Committee, the concerned bank will arrange to sell the securities at the ruling price through its branches/ correspondent banks/RBI at Bombay or any other metropolitan Centre and credit the amount realised, less incidental charges, to the account of the Government.

9.8 The receipts on account of maturity or sale of the securities would be taken to the account of the “Calamity Relief Fund Investment Account”. The incidental charges on sale would be charged on the Fund.

1. The auctioned Treasury Bills may be purchased by the bank either at the Treasury Bill auctions on the basis of a non competitive bid or in the market.

9.10 The Committee will assess the requirements of assistance from the Fund for financing relief expenditure. The provision for expenditure on relief will be made in the budget of the State Government under the relevant heads. The extent of relief expenditure to be financed from the Fund as decided/ authorised shall be withdrawn from the Fund by the Committee after disposal of the investment holdings in the manner prescribed in para 9.11 and credited to the CRF Investment Account. However, only the actual amount of relief expenditure shall be brought to account under the head “2245-Relief on account of Natural Calamities-05 Calamity Relief Fund-901 Deduct amount met from Calamity Relief Fund”, which will appear as a recovery below the line in the Demands for Grants of the State Government.

9.11 To moot liability on account of the claims sanctioned for relief, the Committee will first dispose of its holdings of auctioned Treasury Bills to the extent required, the oldest lot of bills being sold first and so on. If the amount obtained by the sale of auctioned Treasury Bills is not sufficient to meet the liability towards relief sanctioned, the Committee may encash the deposits with the local branches of the scheduled commercial banks and the co-operative banks. The Central Government dated securities may be sold only if the amount realised by the sale of treasury bills and encashment of the deposits is not adequate.

9.12 The concerned State Government will pay to the RBI/SBI/other banks a commission at the rate determined by RBI in consultation with the concerned State Government. These charges shall also be borne by the fund as in the case of the charges indicated in paras 9.4 and 9.8. the loss or gain on the sale of securities shall also be taken to the account of the Fund.

10.1 Items and Norms of Expenditure- The expenditure on restoration of damaged capital works should ordinarily be met from the normal budgetary heads, except when it is to be incurred as part of providing immediate relief such as restoration of drinking water sources or provision of shelters etc. or restoration of communication links for facilitating relief operations. A Committee of experts and representatives of States set up by the Ministry of Agriculture shall review the list of items of expenditure which alone will be chargeable to the Fund. A State specific list shall also be finalised in consultation with the representatives of the concerned State Government after taking into consideration the State specific needs and practices.

10.2 The norms for the amounts to be incurred on each approved item of expenditure shall be prescribed by the State Level Committees. The norms so fixed shall be communicated to the Union Ministry of Agriculture which may modify them only when they are significantly high. In case any State Government exceeds the amount prescribed the excess expenditure should be borne from the normal budget of the State Government and not from CRF.

10.3 Expenditure on training of the core multidisciplinary group created in the State as per the guidelines of the Ministry of Agriculture shall be met from CRF.

11.1 Monitoring by the Ministry of Agriculture- The Ministry of Agriculture will be nodal Ministry for overseeing the operation of CRF. They shall monitor the scheme of CRF and may advise State Level Committee from time to time in this regard to ensure proper functioning of the scheme. Further, Ministry of Agriculture shall recommend for adjustment/ withholding of release of any instalment to the States in the event of any deficiency/ short coming in the implementation of the scheme by the States.

11.2 The State Governments shall furnish every year an Annual Report on Natural Calamities in the format prescribed by Ministry of Agriculture. This report shall be sent by every State Government to the Ministry of Agriculture positively by 30^th September, every year, even if the report is nil.

11.3 The National Centre for Calamity Management (NCCM) to be established by the Ministry of Agriculture shall, inter alia, undertake evaluation of the expenditure incurred out of CRF.

12. Unspent Balance In the Fund- The unspent Balance in the Fund as at the end of the Financial year 2000-05 will be available to the State Government for being used as a resource for the next plan.

13. Accounts- The Accounts of the Fund and the investment shall be maintained by the Accountant General incharge of accounts of the State in the normal course. The Committee will, however, maintain subsidiary accounts in such manner & details as may be considered necessary by the State Government in consultation with the Accountant General.

14. Savings- The Central Government shall issue instructions relating to the provisions of the scheme as may be considered from time to time to enable smooth functioning of the scheme. The Central Government may also alter/modify the scheme if considered necessary subsequently. In case of any difficulty in the operation of any provision of this scheme, the central Government, if satisfied, may relax the provisions.

Calamity Relief Fund 2000-05

Punjab :                                                                                               Rs Crores

All States :

All figures in Rs Crores