Govt to tap contingency fund for quake relief

The finance ministry has decided to tap the Contingency Fund of India to fund relief work as it has fully utilised the National Calamity Contingency Fund.

The Centre will seek parliamentary approval for allocating more money to the NCCF during the Winter Session. Officials said the government had exhausted Rs 1,500 crore budgeted for the current financial year.

The Centre had sanctioned Rs 700 crore to Maharashtra during the floods that hit Mumbai and other parts of the state, and Rs 300 crore to Karnataka for flood-relief activities. It had also tapped the NCCF for relief-work in Gujarat, which was hit by floods in early July.

The government has already announced Rs 600 crore for relief in the earthquake-affected areas of Jammu & Kashmir.

The NCCF was set up on the recommendation of the Eleventh Finance Commission. The revolving fund had an initial corpus of Rs 500 crore.

It is funded through the national calamity contingent duty, a 1 per cent levy on polyester filament yarn, motor cars, multi-utility vehicles and two-wheelers.

In addition, the government also levies Rs 50 per metric tonne on domestic crude oil.

The government had raised the corpus of the Contingency Fund from Rs 50 crore to Rs 500 crore in the last Budget. Prior to this, the corpus had been raised in the seventies.

The government had exhausted Rs 1,600 crore allocated to the NCCF last year. It had subsequently raised the amount to Rs 2,819.69 crore in this year's Budget for help extended to the tsunami-affected areas.