The devastating earthquake in Gujarat on January 26 early this year had caused a damage to the tune of Rs 15,308 crore, according to preliminary estimate in socio-economic review of Gujarat released with the state budget for 2000-01. The review said the reconstruction cost representing the cost of buildings to an improved standard and cyclone resistant features had been estimated to the tune of Rs 11,500 crore.
Loss of value added due to earthquake was estimated to be between Rs 2,300 to Rs 3,000 crore or two to three per cent of 1999-2000 GDP over three years and the impact was likely to fall mostly in the year 2000-01. The impact on the fiscal deficit was estimated to be as much as Rs 10,100 crore in aggregate over three years.
The deterioration in the fiscal balance would be mostly due to increase in expenditure related to relief, reconstruction of public assets and assistance to reconstruction of private assets, the largest component of which was assistant to reconstruction of housing. It was expected that much of the reconstruction expenditure would take place in 2001-02 and 2002-03. This could increase the fiscal deficit by as much as 2.5 percentage points in 2000-01, 3.3 percentage points 2001-02 and 1.7 percentage points in 2002-03.
Bureau Report