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Finance Minister Speech : Gujarat Earthquake
Gujarat Earthquake
91. The earthquake in Gujarat has been a terrible and unprecedented tragedy in terms of loss of life and damage to property. Although I am confident that the inherent resilience and entrepreneurial spirit so characteristic of the people of Gujarat will result in quick restoration of economic activity, I would like to assure the House that we have the capacity to fully meet the challenges of such natural calamities without deflecting from our path of pursuing our economic goals.
92. To enable the State Government to deal with the situation, Government of India is extending the following assistance:
lRs 500 crore was made available to the State immediately from the National Calamity Contingency Fund.
lThe National Calamity Contingency Fund, set up with initial corpus of Rs 500 crore as a result of the Eleventh Finance Commission recommendations, is being augmented by the imposition of a 2 per cent surcharge on personal income tax and corporate tax.
lAssistance will be provided to the State Government under various Centrally Sponsored Schemes for reconstruction of roads, bridges, power installations, school buildings, public utilities and other public infrastructure.
lArrangements have been tied up with the World Bank and Asian Development Bank for obtaining a line of credit of US $ 800 million. A joint team has already visited Gujarat and substantial additional funds are expected to be negotiated.
lRBI has instructed banks to make special arrangements for freezing of recoveries and extension of new loans on a liberal terms for borrowers in the affected areas.
lThe National Housing Bank and HUDCO have set apart adequate funds for housing reconstruction. I also propose to allocate a special quota of tax free bonds of the order of Rs 2000 crore between the two institutions.
lAs was done after the Orissa cyclone, cement and steel used for construction in the Indira Awas Yojana, by HUDCO and by agencies identified by the State Government, would be exempt from excise duty.
lThe Government of Gujarat will be enabled to raise funds by floating tax free earthquake relief bonds which will be open to subscription in Rupees to individuals and others including Non-Resident Indians through the Reserve Bank of India.
lAll goods intended for relief have been exempted from excise and customs duties; direct tax assessees have been given extension of time for filing their returns.
93. A natural calamity of this magnitude has also highlighted the need to set up permanent institutional arrangements for management of national disasters. The National Committee on Disaster Management under the Chairmanship of Prime Minister will be making recommendations for laying down effective long term strategy for this purpose.
