Supreme Court Directs Union To Take Appropriate Steps On Finance Commission's Recommendations For COVID Relief

The Supreme Court has directed the Union of India to take appropriate steps on the recommendations made by the Finance Commission in its XVth report regarding social security and welfare measures in the wake of COVID-19 pandemic.

"We hope and trust that the Union Government will consider the recommendations made by the Finance Commission made in its XVth Finance Commission Report and take an appropriate decision in consultation with other stakeholders and the experts", the Court observed.

A bench comprising Justices Ashok Bhushan and MR Shah was dealing with two PILs which sought Rs 4 lakh ex-gratia compensation for the dependents of those who died due to COVID and COVID-related difficulties.

The petitioners submitted that the Finance Commission, a constitutional body under Article 280 of the Constitution, in its XVth Report has suggested the Government of India to launch National Insurance Scheme for Disaster Related Deaths in India which will not only be able to work as Social Protection Scheme but will also not increase the administrative burden on the Government. It was also submitted that the Commission has made various recommendations regarding utilization of funds for disaster management.

The Central Government informed the Court that the allocation of funds to the National Disaster Response Fund and the State Disaster Response Funds are made on the basis of various recommendations made by the successive Finance Commissions. The XV-Finance Commission in para 8.11 of Chapter 8 of its report for the period 2021-22 to 2025-26, while making allocation under NDRF and SDRF, has chosen, to deal with the issue of financing of Covid-19 pandemic. This report made recommendations for Disaster Risk Management, covering the period from 2021-2022 to 2025-2026, expanding the scope of Disaster Management beyond the traditional response and relief functions, to include preparedness, mitigation, recovery and reconstruction, as reflected in chapter 8 of the XVth Finance Commission's Report. The Centre submitted that this report of XVth Finance Commission along with the Explanatory Memorandum was laid before the Parliament, as mandated under Article 281 of the Constitution of India.

Four insurance interventions suggested

The Court noted that that XVthe Finance Commission has recommended four insurance interventions :

• National Insurance Scheme for Disaster-related Deaths
• Synchronising Relief Assistance with Crop Insurance
• Risk Pool for Infrastructure Protection and Recovery
• Access to International Reinsurance for Outlier Hazard Events

Ex-gratia left to the wisdom of Finance Commission and NDMA

While holding that the National Disaster Management Authority has a statutory duty under Section 12 of the Disaster Management Act to recommend guidelines for minimum relief, including ex-gratia, for victims of the disaster, the Court refrained from directing the Government to pay a particular sum as compensation.

The Court said that the quantum of ex-gratia is left to the wisdom of the National Disaster Management Authority and the Finance Commission.

"The Union of India to take appropriate steps on the recommendations made by the Finance Commission in its XVth Finance Commission Report bearing in mind paragraph 8.131 in consultation with other stakeholders and experts", the Court directed.