A tremor shatters down homes and displaces communities within a moment. It also sends out shivering signals and captures the attention of philanthropists. Society at large responds by turning up to extend help and by donating to Relief Funds. But, beyond the immediate moments of relief, it requires a prolonged and protracted involvement to ensure just rehabilitation. Even as Kutch was waking up to celebrate the first Republic Day of the century, a tremor struck it. The wailing region waited for help to rebuild itself.

Multilateral funding was also to find its way in. The World Bank and Asian Development Bank announced Earthquake Reconstruction Assistance to the state of Gujarat. A two phase programme in consultation with Govt of India, World Bank and Asian Development Bank for reconstruction and rehabilitation at a cost of USD 2300 million (Rs 107.60 billions or Rs. 10760 crores, 1 crore=10 millions) was prepared by Govt of Gujarat. But while more than willing to disburse the finance fast, the multilateral financial institutions have rather been very slow to monitor the reconstruction programme threadbare and to press for minimizing corruption.

Even after scathing comments in two consecutive reports from the (CAG) on numerous irregularities in the use of the relief funds, the state government has failed to respond. Several questions of accountability remain, and the state government has not yet come out with a comprehensive white paper on the Earthquake Reconstruction Programme.

Furthermore, in relation to a PIL filed in 2001, High Court directed the Govt of Gujarat to constitute a centralised fund and ensure that all reconstruction moneys credited to this Fund and utilised through GSDMA. This was not done.

    Special Civil Application No 844 of 2001
    Hon Chief Justice Mr D M Dharmadhikari and Hon Chief Justice Mr P B Majumdar on February 17, 2001

    "So far the prayer for creation of separate fund for earthquake victims based on the contributions and donations of various governmental and non governmental organisations and individuals is concerned, a separate Fund is directed to be opened by the Authority specially constituted for Disaster Management Operations. The account of the receipt and expenditure of the relief material in cash and in kind shall be duly maintained by the Authority specially set up by the government for the purpose. The account of the receipt and expenditure so maintained shall be subjected to periodical inspection and audit by nominee of the Comptroller and Auditor General of India, to whom a copy of this order shall be sent for necessary action..."

The Comptroller and Auditor General's audit reports suggest that there has been a clear case of contempt of this direction of the High Court. Funds have been disbursed through GSDMA as well as through other departments. One wonders as to why Gujarat High court has not taken a suo moto action.

Here are some of the highlights of the CAG's audits of the state reconstruction programme:


The CAG report for the year ending March 2001 stated: “as accounts of receipts and issue of relief materials received from various countries was not maintained, there was unnecessary purchase of similar materials. Possibility of pilferage, malpractice in issue of donated material could not be ruled out.” The immediate relief to be provided to the victims was delayed in several cases upto seven months and cash doles and assistance were paid in excess by Rs 310 millions, according to a CAG test check audit in few talukas.


The CAG report for Gujarat (civil) for the year ending March 31 2002 sharply criticizes the Minister of Jails and Rural Housing for purchasing the tarpaulin sheets at exorbitant rates, violating a government decision. CAG states, “Against the Government decision (1 February 2001) to purchase the required number of tarpaulins at the rate of Rs.225 per piece so as to provide temporary shelter, Minister of Jails and Rural Housing purchased 21600 pieces of the same size (February 2001) at a cost ranging from Rs.1150 to Rs.1175 per piece resulting in an unjustified excess expenditure of Rs 2.51 crore.”(Rs 25.1 millions)


Against 238,057 houses totally destroyed and 1,016,425 houses partially damaged, respectively 227,580 and 969,379 houses were found eligible for assistance. For the assistance, the houses were categorized as G1 (minimum damage) to G5 (total collapse). However, since there remained certain grievances against categorisation of damaged houses under the first survey, the village level/district level committees were constituted to redress grievances. The redressal mechanism would involve detailed review of each file, scrutiny of application, survey sheets, photographs, resurvey and justification for upgradation.

There were large discrepancies between the figures of category wise number of affected houses reported by three District Collectors to Commissioner of Relief and to Audit. Similarly large discrepancies existed between the figures of paid cases of house assistance as per the records of Commissioner of Relief and that of Gujarat State Disaster Management Authority.

These discrepancies cast doubts on the genuineness of figures and indicate lack of co-ordination in monitoring works by various agencies, and the deep rooted tendency to carry business as usual. The CAG noticed during the audit scrutiny in the year 2001-'02 that "large amounts were being disbursed by Government for relief/rehabilitation works through the budgetary grants to various line department, even while GSDMA was to take over such activities" and observed that "accounting of relief works, as per the laid down procedure of GERRF are not being followed by implementing agencies and consequently this would affect the quality and reliability of GSDMA."

While the estimated cost of reconstruction works under World Bank assistance in phase 1 stood at Rs 7.6725 billions (March 2001) the actual expenditure under the programme escalated to Rs 10.8151 billions within a year (March 2002).

Such an increase was due numerous upgradations and inclusions in the list of eligible cases for assistance. However, in certain cases the manner in which grievances were dealt raises doubts and in certain cases payments were made to ineligible beneficiaries amounting to Rs 95.50 millions.

The Surendranagar District Level Committee met on September 28, 2001 to look into the matter. Within a single day the committee reviewed and cleared 1515 cases of upgradation in 41 villages from G1, G2, G3 and G4 categories to G5. Detailing this CAG said that such a review in a single day is not free from doubt and the matter called for an investigation.


Loss to 9861 industrial units, 29920 artisans and 365 hotels was calculated at Rs 7198.70 millions, Rs 694.50 millions and Rs 838.4 millions respectively. The CAG conducted a test check of just 228 cases (30%) out of 763 cases of subsidy payments and it was revealed that six District Industry Center and two Financial Institutions sanctioned Rs 98.3 millions in respect of 121 cases in violation of norms. The CAG also pointed out that subsidy was sanctioned to 14 hotels for ineligible items like furniture/fixtures, kitchen wares etc., in violation of Government Resolution of April 2001, resulting in extra financial liability of Rs 6.9 million.


The Project Officer, District Primary Education Programme (DPEP) was in charge of restoring 49273 classrooms (6974 totally destroyed and 42299 partially damaged) in 18 districts. The Project officer had finalized the construction programme for 9001 classrooms, exceeding the original estimate by 2027. Still, to find 749 classrooms in three districts (Jamnagar, Kachchh and Surendranagar) left out of re-construction programme is curious.

Temporary shelters were required for functioning of 2143 collapsed schools and 4468 temporary shelters were provided by NGOs. The Director of the DPEP chose to procure 2049 temporary shelters at a cost of Rs.52000 per piece against their availability at Rs.25000 per piece in June 2001. The CAG criticized this move stating, “this resulted in avoidable expenditure of Rs.106.5 millions besides excess payment of Rs 55.3 millions.”


As against the provision of Rs 1310 millions for relief to farmers, the expenditure till March 2002 was only Rs 405 millions. During scrutiny of records in four test-checked districts, The CAG noticed irregularities of Rs 71.4 millions on items like distribution of kits to non entitled persons, procurement of sub standard storage bins, payment on duplicate documents, over payment made to joint land holders etc. The CAG report for the year ending March 2001 has also criticized Director of agriculture for procurement of farmers’ kits worth Rs 242.9 millions without due procedure.

Removal of Debris: Party Karseva gets public finance!

The CAG report for the year ending March 2001 had also revealed that there was rampant corruption on removal of debris. In certain cases transporters had reported two trips in a minute, even three trips in a minute. The March 2002 report opines that the expenditure of Rs 73.2 millions spent on clearance of debris by the Roads and Buildings division, Bhuj and the Taluka Development Officer, Rapar, was highly doubtful due to non-maintenance of records like number of trips, tare weight of vehicles, inadequate supervision etc.

Even after scathing comments from two consecutive CAG reports, the state government has failed to respond to Public Accountability questions.

Investigation/audit reports
 •  CAG, 2001
 •  CAG, 2002
 •  Indian People's Tribunal, 2001

 •  The matter of relief, Dilip D'Souza

Again during the scrutiny of records, the CAG came across an incident where an official allowed Karseva - staged by the ruling Bharatiya Janata Party – to be funded by public finance by allowing Karsevaks access to free building material. CAG states without mincing words: “The Executive Engineer, R&B division Bhuj irregularly supplied from the Material Bank, building material for Rs 19.82 lakh (Rs 1.98 million) free of cost for Karseva as directed by ministers

To top all this off was this. At a recent meeting with campaigners on public interest issues on April 27 2004, a Delhi based World Bank officer asked his colleagues, “is there too much corruption in World Bank funded projects in India?”.

Without more active citizen involvement both from within the affected communities and otherwise, multilateral funds that were accepted with promises of just rehabilitation will continue to go down the drain of corruption. For the moment, public accountability concerns continue to lie buried under the “everybody loves a good calamity” situation.