The Centre has informed the Supreme Court that the finances of states and Centre are under severe strain, due to the reduction in tax revenues and increase in health expenses on account of the coronavirus pandemic. And Rs 4 lakh compensation can’t be paid to all those who died due to Covid-19 as it would exhaust the disaster relief funds, and also impact the Centre and states’ preparation to address future waves of COVID-19.

The centre added that the deadly disease has caused more than 3.85 lakh deaths – which is likely to increase and states, reeling under severe financial strain, cannot pay everyone. The government’s response comes after the Supreme Court asked it to inform its policy on Covid compensation and death certificates after a plea asked for ₹ 4 lakh for victims.

In its 183-page affidavit filed on Saturday night, the Centre said: “If an ex-gratia of Rs 4 lakh is given for every person who loses life due to Covid-19, the entire amount of SDRF may be spent on this item alone, and total expenditure may go up further.” The Supreme Court will take up the matter for hearing on June 21, Monday.

“If the entire SDRF funds get consumed on ex-gratia for Covid-19 victims, the states may not have sufficient funds for organizing Covid-19 response, for provision of various essential medical and other supplies, or to take care of other disasters like cyclones, floods, etc. Hence, the prayer of the petitioner for payment of ex-gratia to all deceased persons due to Covid-19 is beyond the fiscal affordability of the State governments,” it said.

The centre in its affidavit also said due to increased health expenses and low tax revenue, states cannot afford to pay compensation for lakhs of Covid victims. “Utilisation of scarce resources for giving ex-gratia, may have unfortunate consequences of affecting the pandemic response and health expenditure in other aspects and hence cause more damage than good,” the centre added in its affidavit.

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