The Supreme Court has reserved its verdict seeking compensation of Rs 4 lakh to the kin of those who have died of Covid-19 or related complications.  The Centre has stated that state governments cannot afford to pay this, and had argued in favor of a broader approach including health interventions.

Provisions for Compensation

• Last year, the Centre declared Covid-19 as a notified disaster under the Disaster Management Act.
• Section 12(iii) of the Act says the National Authority shall recommend guidelines for the minimum standards of relief to be provided to persons affected by disaster.
• It includes “ex gratia assistance on account of loss of life as also assistance on account of damage to houses and for restoration of means of livelihood”.
• The Centre revises this amount from time to time.

What is the latest amount?

• On April 8, 2015, the Disaster Management Division of the Home Ministry wrote to all state governments and attached a revised list of “norms of assistance”.
• Under “ex gratia payment to families of deceased persons”, it specified: Rs 4 lakh per deceased person including those involved in relief operations or associated in preparedness activities.
• This is subjected to certification regarding cause of death from appropriate authority.

So, what about compensation for Covid?

• Last year the Home Ministry wrote to state governments that the central government has decided to treat it (Covid-19) as a notified disaster for the purpose of providing assistance under SDRF.
• It attached a partially modified list of items and norms of assistance.
• It did not specify payment of ex gratia to families of deceased.
• Some states have decided to pay, but not for all deaths.

How has the government responded to the petition?

• The Centre has submitted that ex gratia of Rs 4 lakh is beyond the affordability of state governments.
• It argued that if Rs 4 lakh is paid to the kin of each, it “may possibly” consume the entire amount of the State Disaster Relief Fund (SDRF).
• This would leave states with insufficient funds for organizing a response to the pandemic, or to take care of other disasters.
• The centre argued that the term ex gratia itself means the amount is not based on legal entitlement.

Way ahead

• A broader approach, which involves health interventions, social protection, and economic recovery for the affected communities would be a more prudent, responsible, and sustainable approach.

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