Budget Allocation to fight Corona: Odisha, Tamil Nadu allocated funds

The US Government recently allocated 100 billion USD to fight Corona Virus. Following the US, UK had announced 400 billion USD to be allocated for Corona Virus.

Ranked the fifth largest economy in the world with a GDP of 2.94 trillion USD, overtaking UK, India is yet to allocate funds for Corona Virus. However, the Ministry of Health and Family Welfare of working hard to contain the spread of the disease. Also, GoI announced that the Rs 4 lakhs is to be provided to families of the victims affected with Corona Virus.

Justification

The Government of India has still not allocated funds as the fiscal deficits are already high. The Union Budget 2019-20 estimated the fiscal deficit to be Rs 7 lakh crore. Also, this year (2019-20) it is expected that the tax collection is to fall short by Rs 2.5 lakh crore (1.2% of the GDP).

Rather, the Union Government has made the state disaster funds available by notifying COVID-19 virus spread as “disaster”. By law, the State Disaster Response Funds can be used only for notified Disasters under Disaster Management Act, 2005.

State Disaster Response Fund

The fund was constituted under Disaster Management Act, 2005. The fund was constituted based on the recommendation of 13th Finance Commission. Every year, the GoI releases these funds based on the recommendation of the Finance Commission. 75% of the funds are shared by the Centre for the states under General Category. For the states under Special Category, 90% of the funds are contributed by the State.

The Ministry of Home Affairs if the sole head in managing these funds. The National Disaster Response Funds are supplemented when there is shortage in the funds allocated to the states.

Funds Allocated

Odisha became the first state in the country to allocated funds to fight against Corona Virus. The Odisha State government has allocated Rs 200 crores to fight against the deadly disease. The Tamil Nadu Government allocated Rs 60 crores.

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