[The Chief Minister, who had lost the support of his entire cabinet, and enjoys the support of only 2 legislators of the Congress Legislature party, who had been avoiding going to New Delhi for past one week on the pretext of stomach pain, finally had been sternly summoned by the Congress high command, and he is scheduled to meet Congress President Ms.Sonia Gandhi on 7th July 2008 10.A.M, who may send him to AIIMS hospital for curing his stomach pain. We submit the report of the Comptroller and Auditor General on his handling of the Tsunami funds, over which, Dravida Peravai had been spearheading a campaign for CBI enquiry. Let media men be in slumber by not even exposing CAG Report indictments, but like tsunami that struck by surprise, the Chief Minister who stage manages a clean image by throwing lavish advertisements even to monthlies, weeklies with less than 100 copy circulation, will be washed away to the dustbin of history. Of course he is the richest and purchasing power of that money will be witnessed from the day he steps down till next electoral verdict is written by the people of Puducherry….. N.N]



This chapter presents two performance reviews on Tsunami Relief, Rehabilitation and Reconstruction, Functioning of Government General Hospitals and one long paragraph on Sarva Shiksha Abhiyan.




3.1 Tsunami Relief, Rehabilitation and Reconstruction Highlights: The Tsunami of December 2004 damaged 33 villages in the Union Territory of Puducherry. The Government provided assistance in cash and kind to the affected families. There was no comprehensive action plan to utilize funds received from Government of India. There were deficiencies in identification of beneficiaries for immediate relief and rehabilitation of Tsunami affected people. Assistance for repair/replacement of fishing crafts was delayed by 4 to 17 months after the calamity. There was delay in providing assistance for rehabilitation. Considerable delay was also noticed in reconstruction activities. Consequently, Tsunami affected families were not resettled as of September 2006. Monitoring of the implementation was poor. – Disaster Management Authority was not functional when Tsunami struck. Government of India scheme for creation of coastal shelterbelt to reduce the impact of cyclone was not implemented during 2000-04.

(Paragraphs and

– Government of India sanctioned Rs 255.62 crore till March 2006 as against Rs 312.37 crore recommended by central team. The reported expenditure of Rs 175.44 crore included Rs 55.42 crore comprising amount kept unspent, inadmissible expenditure, diversion of funds and a case of excess expenditure. (Paragraph 3.1.7)


Audit Report for the year ended 31 March 2006 – Though 2,006 houses were identified as damaged in Tsunami, Revenue Department did not restrict the payment of compensation only to house owners, but compensation was given to 5,247 families who claimed to live there. Scale of assistance prescribed by GOI was not followed. (Paragraphs and


– Government did not take action to claim and pay insurance amount due to active fishermen who died in Tsunami under the National Scheme for Welfare of Fishermen. (Paragraph


– Assistance to fishermen was given 4 to 17 months after the calamity. (Paragraph


– No comprehensive programme was evolved for infrastructure development for utilizing plan assistance. Out of 7,567 numbers of houses planned to be constructed, only 595 houses were completed as of November 2006 and of this, 495 houses were not allotted to Tsunami victims. (Paragraph


3.1.1 Introduction: Tsunami is a series of waves generated when a large body of water such as a lake or ocean is rapidly displaced on a massive scale due to earthquake or volcanic eruptions. The impact of earthquake that had its epicenter off the Coast of Sumatra Island in Indonesia triggered the occurrence of Tsunami in the south eastern coast of India on the morning of 26 December 2004. The Tsunami caused extensive loss of lives and damages to both public and private properties along the Coastal States of South India including Union Territory (UT) of Puducherry and Andaman and Nicobar islands. In the UT of Puducherry, which consists of four coastal enclaves1, Tsunami caused damages in Puducherry and Karaikal regions and Government notified (January 2005) 33 villages in Puducherry (16) and Karaikal (17) regions for the purpose of relief and rehabilitation. The details of damages reported to Government of India (GOI) are given in Appendix XV. The majority of affected families derived their livelihood from fishing, agriculture and rearing livestock. Immediately after Tsunami, Government accommodated 30,000 affected people in 48 relief camps2 and distributed ex-gratia payment to families of 1 Three (Puducherry, Karaikal and Yanam) in the eastern coast and one (Mahe) in the western coast 2 Schools, marriage halls, temples, community halls, etc.


Chapter III – Performance Reviews 2 7 the deceased, cash for funeral and medical expenses. Relief packages consisting of rice, kerosene, saree and dhoties etc., bed sheets and supply of textbooks, uniforms to affected children were also made during December 2004 to February 2005. Cash dole were given for purchase of utensils, repair of damaged houses, sustenance and loss of crop and livestock. Government also restored the essential services like water supply and electricity. As mid-term relief, the Government provided assistance for repair and replacement of fishing crafts and reclamation of agricultural land. Besides repairing public property like roads, bridges etc., the Government has undertaken construction of houses, public utilities and preventive measures such as construction of coastal protection belt as one of the permanent relief measures.


3.1.2 Organizational set-up: Immediately after the disaster, Government appointed (31 December 2004) Development Commissioner and Secretary (Education and Power) as the Relief and Rehabilitation Commissioner (RRC) to manage and co-ordinate the arrangements for distributing relief supplies received from GOI, UT Government and other sources. The Revenue Department was placed under his control for this purpose. The immediate relief measures undertaken by five departments3 were monitored by State Level Relief and Rehabilitation Committee constituted in January 2005 with Chief Minister as Chairman. Government also established (April 2005) a Project Implementation Agency (PIA), a registered society, headed by a Project Director and assisted by Joint Project Director and other staff. The society has to implement the mid-term and long term rehabilitation and reconstruction measures through Revenue Department (now renamed as Revenue and Disaster Management Department) and other 134 departments. Besides, 185 Non-Governmental Organizations (NGOs) were involved in construction of houses to resettle the Tsunami affected families along with PIA.


3.1.3 Audit objectives: The objectives of Audit were to assess: whether proper institutional mechanism had been set up byGovernment for disaster management, adequacy of funding for relief activities and whether utilisation ofthe funds was proper,3 Agriculture, Animal Husbandry, Education, Fisheries and Revenue4 Agriculture, Animal Husbandry, Education, Electricity, Fisheries, Forest and Wildlife, Health, Local Administration, Public Works, Rural Development, Social Welfare, Tourism and Women and Child Development5 Over and above, Government of Maharashtra has also undertaken activities pertaining to construction of houses


Audit Report for the year ended 31 March 2006:28: the efficiency in providing immediate assistance and rehabilitation to affected families, the efficiency, economy and effectiveness of long term relief activities such as creation of assets and permanent infrastructure and resettlement of Tsunami victims, ?? The quality of monitoring and co-ordination mechanism to oversee rehabilitation activities.


3.1.4 Audit criteria

The criteria adopted in conducting the audit were: Rules in force on disaster management and policy adopted by the Government; conditions stipulated by GOI and UT Government while releasingfunds; the details of assistance received from various sources; norms prescribed by GOI for expenditure from National CalamityContingency Fund (NCCF);?? Target and schedule prescribed by Government for rehabilitation work and?? Monitoring mechanism adopted for extending relief and rehabilitation.


3.1.5 Audit coverage and methodology: Audit was conducted from November 2005 to March 2006 in Revenue and 13 other departments6, PIA and District Rural Development Agency (DRDA). Records relating to the period December 2004 to March 2006 on relief and rehabilitation activities maintained in the 14 departments covering all the 33 affected villages and status reports on the activities of NGOs in PIA were test checked in audit. An entry conference was held with the RRC in January 2006 and field visits were undertaken.

6 Agriculture, Animal Husbandry, Education, Electricity, Fisheries, Forest and Wildlife, Health, Local Administration, Public Works, Rural Development, Social Welfare, Tourism and Women and Child Development


Chapter III – Performance Reviews; 2 9: Audit findings

3.1.6 Disaster management Institutional arrangement

Based on the GOI recommendations, the Government constituted a State Disaster Management Authority in September 2003 under the Chairmanship of Chief Secretary to ensure co-coordinated steps towards mitigation and preparedness when disaster strikes. A District Disaster Management Committee was also formed (September 2003) for extending immediate relief to disaster affected people. However, no Disaster Management Policy has been framed. After occurrence of Tsunami, Government constituted (03 January 2005) a Committee under the Chairmanship of Chief Minister to monitor and review the relief operations. Government also appointed a Relief and Rehabilitation Commissioner to manage and co-ordinate relief operations. Thus, the institutions set up to manage disaster were not functional at the time of occurrence of Tsunami. After notification of the Central Act in December 2005, the UT Government was to initiate action to frame Rules. But the Rules had not been framed as of October 2006. No framing of Disaster Management Policy in time resulted in the absence of set framework of actions to be undertaken upon occurrence of Tsunami. Government stated (November 2006) that GOI had been requested (October 2006) to bring the Central Act into force in the UT with effect from 2 October 2006 and the Rules as well as the state policy would be framed and finalized on receipt of GOI notification. Construction of coastal shelterbelt: All the four regions of the UT are located in coastlines and prone for cyclone. In order to create a belt of trees in coastlines to reduce the impact of cyclone, GOI sanctioned (January 2001) Rs 90.32 lakh to cover 448 hectare of land under ‘Integrated Afforestation and Eco-Development Project Scheme’. The scheme was to be implemented during 2000-02. GOI released Rs 20.12 lakh during 2000-01 as first installment. The Forest Department spent Rs 3.40 lakh for creating coastal shelterbelt during 2000-01, but stopped the work due to objection raised by fishermen. As the first installment was not spent in full, the balance amount was not released by GOI. Only after Tsunami, the Department spent Rs 5.48 lakh during 2004-05. The balance amount of Rs 11.24 lakh remained unspent as of July 2006. Had the Department implemented the scheme in 2001-02 by obtaining the entire funds sanctioned by GOI, the impact of Tsunami on the lives and properties could have been contained and reduced.Government stated (November 2006) that the Central scheme was not successful due to non-cooperation of the local fishermen community. This contention is not tenable as the Government failed to convince the Rules under ‘Disaster Management Act’ and Government policy on Disaster Management were not framed fishermen community regarding the benefits of the scheme for more than two years.


The UT Government sought (January 2005) Rs 465.99 crore for providing short term and long term relief to the Tsunami affected people. The activity wise details are given in Appendix XVI. The central team visited (January 2005) the affected areas and recommended Rs 312.37 crore. GOI sanctioned (March 2005 to March 2006) Rs 255.62 crore for Tsunami relief and released Rs 203.21 crore during the period March 2005 to March 2006. Government spent Rs 175.44 crore as of March 2006. The activity-wise details are given in Appendix XVII. Though the amount already released was not spent in full, GOI provided (2006-07) an additional plan assistance of Rs 220 crore for creation of infrastructure in Tsunami affected areas. Government stated (November 2006) that the report prepared in first week of January 2005 was tentative and did not include long term rehabilitation GOI sanctioned more funds than sought for, but the amount released was not spent


Chapter III – Performance Reviews: 3 1 requirement. This contention is not tenable as Rs 465.99 crore sought for by the UT Government included Rs 358.01 crore for reconstruction activities. Overstatement of expenditure

The expenditure of Rs 175.44 crore includes Rs 107.15 crore drawn as advance by eight departments during December 2004 to March 2006, of which Rs 29.517 crore remained unspent as of March 2006. Test check revealed that Revenue and Fisheries Departments kept Rs 7.84 crore, released from funds received under RGRP, in bank (Rs 7.01 crore) and with PIA (Rs 0.83 crore).The remaining six departments kept Rs 21.67 crore received under plan assistance in bank (Rs 16.34 crore), with PIA (Rs 4.25 crore) and with DRDA

(Rs 1.08 crore). Thus, actual expenditure was only Rs 145.93 crore. Government stated (November 2006) that many works could not be taken up due to enforcement of model code of conduct on account of election. The reply is not tenable as the amount was shown as expended without completion of works. Diversion of funds and charging of excess expenditure


Against Rs 32.01 crore released by GOI for giving subsidy to fishermen for purchase of boats, the UT Government paid a subsidy of Rs 46.60 crore.The excess amount was met by diverting Rs 9.07 crore available as savings out of Rs 39.78 crore received under NCCF and Rs 5.52 crore out of Rs 30 crore received for reconstruction activities. Government attributed the diversion to payment of higher scale of compensation. Though cartage and storage charges are to be levied on deposit works only, the Electricity Department also charged Rs 13.33 lakh as cartage and storage charges on Tsunami works, which are Government works. This resulted in inflation of expenditure under ‘Tsunami Relief’. Inadmissible expenditure


Out of the plan assistance of Rs 100 crore released by GOI during 2005-06 to create infrastructural facilities in Tsunami affected areas, Rs 52.59 crore was allocated to Public Works Department. Of this, the UT Government sanctioned Rs 11.19 crore for providing infrastructure in areas not affected by Tsunami as detailed below: 7 Agriculture (Rs 2.75 crore), Education (Rs 0.36 crore), Fisheries (Rs 2.01 crore), Forest and Wild Life (Rs 0.86 crore), Health and Family Welfare (Rs 2.21 crore), Local Administration (Rs 14.41 crore), Revenue (Rs 5.83 crore) and Rural Development (Rs 1.08 crore) Unspent amount was shown as expenditure Infrastructure was provided in areas not affected by Tsunami


3.25 Though Yanam was not declared as Tsunami affected,the works have been executed in Yanam.Construction of Women and Children Hospital, Puducherry7.94 The expenditure incurred during 2005-06 under the ongoing scheme ‘Construction of Women and Children Hospital’ in Puducherry, taken up before the occurrence of Tsunami was transferred to the scheme ‘creation of infrastructural facilities in Tsunami affected area’.

Total 11.19 the expenditure was beyond the scope of the programme. Government stated (November 2006) that flood control works in Yanam were taken up as nearby East Godavari District in Andra Pradesh was declared as Tsunami hit area and the Women and Children Hospital was situated within half a kilometer radium from the coast. These contentions are not tenable as Yanam was not declared as Tsunami affected area. Besides, the hospital work was sanctioned before the occurrence of Tsunami. Unutilized assistance from other sources


In addition to GOI funds, the Government received assistance in kind (cloth, groceries, utensils, etc.) from public for providing immediate relief to the affected families. The materials not distributed were kept in stock for future use. Besides, Rs 2.59 crore was received from Members of Parliament Local Area Development Scheme remained unspent as of March 2006. GOI also allocated World Bank assistance of Rs 158.28 crore (May 2005) under ‘Emergency Tsunami Reconstruction Project’ for undertaking long term relief measures. Out of Rs 75 crore received and deposited with PIA, Rs 2.68 crore was spent as of March 2006. Though, the allocation was made by GOI in May 2005, no concrete proposals were sent even by March 2006 resulting in non-utilization of funds received. Government stated (November 2006) that proposals for Rs 135 crore for Fisheries, Agriculture and Forest sectors were sent to World Bank (May 2006) and of this, seven projects for Fisheries sector were approved for Rs 117 crore. However, no project was taken up even by November 2006.


3.1.8 Immediate relief and rehabilitation measures Immediately after Tsunami, the Government paid immediate relief assistance of Rs 15.66 crore to families affected by Tsunami as ex-gratia payment to family of deceased (Rs 5 crore), cremation expenses (Rs 0.25 crore), medical expenses to injured (Rs 0.44 crore), housing subsidy to damaged houses (Rs 9.28 crore), compensation for crop damage/ha (Rs 0.28 crore) and compensation for loss of cattle/poultry Chapter III – Performance Reviews 3 3 (Rs 0.41 crore). In addition, rice, kerosene, cloth, cash dole for utensils (Rs 2000) and sustenance (Rs 3000) were given to the affected families by Revenue and Fisheries Departments. The deficiencies noticed in the disbursement of immediate relief to the families affected in Tsunami are discussed below: Identification of beneficiaries for payment of compensation -Housing Though only 2,006 houses were damaged in Tsunami in Puducherry, the Revenue Department had not restricted the payment of compensation to owners of the houses but paid compensation to 5,247 families who claimed to live in these 2,006 houses. Government stated (November 2006) that the families residing in the damaged houses suffered the loss. This contention is not tenable as the assistance was meant for repairing of the damaged houses which could be carried out only by the owners. Non-adherence to scale for immediate relief assistance

Government of India released funds for ‘Relief and responses’ from NCCF.Though the UT Government sanctioned expenditure for relief on account of injury, loss of crops, livestock, etc., as per the norms prescribed in NCCF, Rs 6.21 crore were spent by Revenue Department during January 2005 to May 2005 in excess of prescribed monetary limit for providing gratuitous relief for death and assistance for repair and restoration of damaged houses as detailed below: Non-obtaining of insurance benefits Under National Scheme for Welfare of Fishermen, GOI insured 24,500 active fishermen of the UT against accidents resulting in death or injury. Under the scheme, the Fisheries Department had to prefer the claims in case of accidents. Though 318 fishermen died in Tsunami in UT, the Department had not taken action to claim and pay Rs 50,000 per active fishermen who died. After audit had pointed this out, Government stated (November 2006) that action has now been initiated. Deficiencies in identification of beneficiaries – Fishing Government have not enacted the Marine Fishing Regulation Act to issue license for fishing crafts under various categories owned by fishermen in UT. Consequently, the Fisheries Department could not identify the number of fishing crafts damaged or lost in Tsunami. This resulted in payment of assistance based on the affidavits given by fishermen. The Department paid assistance for repair/replacement of 7,878 fishing crafts in Puducherry and Karaikal regions till May 2006. While 17,208 men were required to operate 7,878 fishing crafts, only 13,867 active fishermen were available in Puducherry and Karaikal regions as per census (2000) conducted by the Department. Government contended (November 2006) that all crafts would not be operated at a given time for fishing and one fisherman would be engaged in more than one craft. The fact, however, remained that failure to enact the Marine Fishing Regulation Act resulted in non-identification of crafts damaged/lost and Government had to release assistance based on the affidavits. In Karaikal region, 2,067 fishermen were to be paid assistance for repair/replacement of fishing crafts as per survey conducted by a special team. Of this, 582 fishermen were given fishing crafts by NGOs. Against the remaining 1,485 fishermen requiring assistance, the Fisheries Department Paid assistance to 1,898 fishermen (Rs 15.49 crore) as of May 2006.Resultantly, assistance amounting to Rs 3.37 crore was also extended to 413 fishermen over and above the number of fishermen identified during survey by special team. Government contended (November 2006) that the NGOs would have extended assistance to fishermen who were already benefited from Government. This was indicative of poor monitoring.


UT Government for this purpose with other funds and kept them in savings bank account. This resulted in non-crediting of interest earned on the amount in Tsunami Fund for utilization in Tsunami Relief. Government attributed (November 2006) the delay to non-cooperation of village panchayatars and contended that the interest earned by the society would be spent only for the welfare of fishermen. These contentions are not tenable as the non-cooperation was due to improper assessment of beneficiaries and the interest earned on Tsunami Fund would be utilized for other schemes implemented by the society.


GOI approved (October 2005) the ‘Prime Minister’s Child Assistance Scheme’ which provided for deposit of Rs 51,000 in the name of the child who have lost one parent in Tsunami and were less than 18 years of age on the day of Tsunami. The monthly interest on the deposit should be paid to the surviving parent till the child attains the age of 18 years and the amount would be released thereafter to the child. The scheme was to be implemented from Prime Minister’s National Relief Fund (PMNRF).Though, the Director, Women and Child Development Department identified (December 2005), 172 children under the scheme and funds were received (September 2006), the deposits were not made as of October 2006.Government stated (November 2006) that the Department has been requested to release money. Assistance for repair/replacement of fishing crafts were given 4 to 17 months after the calamity Benefits under the Prime Minister’s National Relief Fund was not extended to people affected in Tsunami


Similarly, under Universal Health Insurance Scheme, approved by GOI(October 2005) for assistance from PMNRF, the persons in the Tsunami affected family were to be insured for death (Rs 2 lakh) and disability(Rs 1 lakh) due to accident. As a comprehensive insurance policy was not evolved, the scheme was not implemented (October 2006).Government stated (November 2006) that the list of fishermen to been rolled was sent to Insurance company and further action would be taken by the Insurance company. This indicates the poor co-ordination by Government with Insurance Company.


3.1.9 Infrastructure development and reconstruction Delay in construction of houses


The UT Government decided (March 2005) to construct houses outside the Coastal Regulation Zone by purchasing land and allot them to families living in Tsunami affected areas. Out of 7,567 houses proposed to be constructed, 4,984 were to be constructed by NGOs and the Government of Maharashtra and 125 by PIA. The remaining 2,458 houses would be constructed by the beneficiaries with Government assistance. Besides, PIA had to provide infrastructure such as internal roads, drains, water supply etc., in all areas where houses were proposed to be constructed. As of November 2006, 595 houses were completed by NGOs, of which 100 houses were handed over to the beneficiaries and construction of 4,389 houses was under progress. While construction of 57 houses was taken up by beneficiaries using Government assistance in the land where the damaged houses were located, the remaining 2,527 houses were not taken up as of November 2006. As such only 100 out of 7,567 beneficiaries were resettled even by November 2006. Besides, construction of houses in the locations affected by Tsunami would defeat the objective of relocation. Improper utilization of funds under plan assistance: Rupees 100 core received as plan assistance during 2005-06 from GOI were allocated to 12 line departments for development of infrastructure in Tsunami affected areas. Of this, Rs 84.09 crore were allocated to Agriculture (Rs 5.50 crore), Fisheries (Rs 6 crore), Local Administration(Rs 20 crore) and Public Works (Rs 52.59 crore) departments. Out of Rs 100 crore, Rs 97.91 crore shown as spent by the line departments. There was no comprehensive programme approved by PIA for utilising the plan assistance of Rs 100 crore. Consequently, the line departments treated the expenditure incurred under various ongoing works also under plan assistance for Tsunami. Test check revealed that the Public Works Department booked (March 2006) Rs 11.36 crore incurred on 13 ongoing Tsunami affected people were not resettled due to noncreation ofinfrastructure.There was no comprehensive programme to utilize the plan assistance given by GOI


Chapter III – Performance Reviews works8 which were sanctioned and work commenced even before the occurrence of Tsunami. Further, Rs 5.25 crore was spent on construction of court building which could not be termed as Tsunami related work. Government contended (November 2006) that the works were executed only in coastal areas, which are prone to natural calamity and many ongoing works were damaged in Tsunami. These contentions were not tenable as the GOI assistance was meant for creating assets in Tsunami affected areas.


Departments had to identify the works required, which resulted in diversion of funds and undertaking works not related to Tsunami. The failure to enact the Marine Fishing Regulation Act resulted in non-identification of beneficiaries for rehabilitation, payment of assistance on the basis of affidavits and extent to which the benefit was availed by victims of Tsunami being not ascertainable. Failure to claim insurance resulted in deprival of benefits to fishermen. There were delays in release of assistance to fishermen. Reconstruction works were delayed considerably and the funds received remained unutilized. Schemes to benefit orphans and families affected in Tsunami were not implemented. Monitoring of the various activities by RRC and PIA was also inadequate.



 Government should frame necessary rules to carry out the provisions of the Disaster Management Act, 2005 enacted by GOI.  Government should evolve concrete programmes for utilizing the unspent amount including Rs 220 crore sanctioned as plan assistance for 2006-07.  Construction of houses to resettle the Tsunami affected families should be completed early and allotment of houses already constructed should be expedited by speedy completion of required infrastructure. Government stated (November 2006) that the recommendations made were taken note of and would be followed in future.