Can the funds parked in the State Disaster Relief Fund (SDRF) of a state government be both present and absent, like Schrodinger's Cat? The Kerala High Court, had to ponder over a situation that had parallels with the hypothetical cat, considered simultaneously both alive and dead, from a thought experiment related to quantum mechanics, while hearing a suo motu case about the prevention and management of natural disasters.
The HC, on Saturday, December 7, came down heavily on the state government for its lack of clarity over the funds available with the SDRF, after the finance officer submitted that while Rs 677 crore was available with the fund, it could not be stated how much of it is available because other expenses might have incurred. As per rules, funds in SDRF should only be used for providing immediate relief to natural disaster victims.
A bench of Justices AK Jayasankaran Nambiar and Muhammed Nias CP then came down heavily on the state government over the failure to provide details on the availability and utilisation of funds and lack of clarity in accounting. The court had earlier sought information regarding the availability and utilisation of SDRF funds.
The finance officer of the Disaster Management department submitted that a total of Rs 782.98 crores is available with the SDRF, of which Rs 97 crore was the state share. He said that Rs 95 crores of the state share was spent between April 1, 2024 and October 1, 2024. He submitted that there is a balance of Rs 677 crores with the SDRF.
The court questioned the absence of proper auditing and financial transparency. “When does the state’s accounts get audited? And how often?” the bench asked, highlighting the absence of annual auditing reports. The court remarked, “We are in this precarious situation because of this. If you cannot give us an estimate of expenses, how can you say money is needed?”
The finance officer, in response, stated that even without disasters, Rs 700 crore is required annually to meet prior commitments. He also said that the Rs 677 crore balance might also not be available in SDRF because other expenses might have incurred. The court came down heavily upon the state government saying, “How can you not show expenditures? Why is there no statement for outflow? You will have no picture of the correct financial position if you do not keep correct accounts. Do you think people in Wayanad have time for this blame game?”
Criticizing the lack of clarity on fund utilisation, the court questioned, “You say Rs 677 crores is available in balance; what percentage of it can be used? How can you say you do not know how much of it can be used?” The bench also questioned the state’s request for Rs 290 crores as immediate assistance, “How did you arrive at that figure? You are asking for another Rs 290 crores for immediate assistance because you do not know how much from the ₹677 crores in SDRF can be used.” The court said such discrepancies not only delay relief but also undermine the dignity of disaster victims in Wayanad.
The Kerala High Court observed that there should be financial accountability and clarity in the state’s request for additional disaster relief funds, and that the state must justify its requirements with concrete data. “The state has to show how the amount in the SDRF is spent before asking for additional funds for immediate assistance. At least have some idea of expenses, then we can ask the Union government,” the court stated.
The court also questioned why the state, despite having a utilisation certificate until April 2024, could not provide the SDRF’s opening balance. “Without having any of this data, how can we have this discussion?” it asked. A utilisation certificate is a document, typically issued by the organisation or department that has received the funds, confirming that the allocated money has been used for the specified purpose. The certificate provides details of expenditures and unspent balances. In times of disasters, additional aid is provided after analysing the use of allocated funds, based on the utilisation certificate.
The Union government’s counsel concurred and sought the state government to provide details of the amount available for utilisation. Highlighting the urgency, the court observed, “When you come to the needs of people, we have to ensure that money comes fast. This discussion is shifting focus from the real issue and will affect the victims in Wayanad.”
The state’s counsel, however, requested more time to furnish details but stressed that more funds have to be arranged for rehabilitation. The court ordered the state to submit complete reconciliation statements by December 12. “We need actual figures. Then we will see if you are justified in seeking more funds, and only then will we ask the Union government to make arrangements,” the bench stated, posting the matter for further hearing next Thursday.
A reconciliation statement refers to a document that compares two sets of financial records to ensure they match and are accurate. In this case, the task is to compare the funds allocated to the State Disaster Response Fund (SDRF) and the actual expenditures made for disaster relief.
The case has been posted for hearing on December 12.
Earlier, the Union government had blamed the Kerala government for the delay in sending documents related to the Wayanad rehabilitation following the landslide disaster. In a reply to a representation given by MPs, Union Home Minister Amit Shah said that the Kerala government failed to send any assessment memo even three months after the incident.
