News Non-Life09 Nov 2018

India:Govt studying natural disaster tax to fund relief efforts

09 Nov 2018

The Indian government has formed a committee comprising several state finance ministers, to assess the feasibility of introducing a tax under the Goods and Services Tax (GST) regime to fund disaster relief.

The move followed Kerala's demand for additional resource mobilisation measures to rebuild the state’s infrastructure in the wake of heavy floods. Kerala had proposed a cess of 10% over and above the state GST to raise additional funds. Losses caused by the floods have been estimated at around INR200bn ($2.8bn).

It was found that the National Disaster Relief Fund (NDRF) and State Disaster Response Fund (SDRF) lacked sufficient funds, according to local media reports.

Meanwhile, the United Nations Office for Disaster Risk Reduction (UNISDR) released a report in conjunction with International Day for Disaster Reduction which fell on 13 October, indicating that India lost $79.5bn to natural disasters from 1998 to 2017.

The report was jointly prepared by UNISDR and the Centre for Research on the Epidemiology of Disasters (CRED). Titled “Report on Economic Losses, Poverty and Disasters for 1998-2017”, it ranks India among the top five countries in the world with the largest losses from disasters.

At $944.8bn, the US has suffered the greatest losses due to disasters in the past 20 years. Following the US are China ($492.2bn), Japan ($376.3bn), India ($79.5bn) and Puerto Rico ($71.7bn). Worldwide, between 1998 and 2017, disaster-hit countries reported direct economic losses of $2.9trn.

In terms of occurrences worldwide, climate-related disasters dominate the picture over the past 20 years, accounting for 91% of all 7,255 recorded events between 1998 and 2017. Within this total, floods were the most frequent type of disaster, making up 43% of all recorded events. Floods also affected the most number of people, at more than 2bn.


 

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