The 2001 earthquake in Gujarat was among the costliest disasters in independent India. As per World Bank reports, the calamity is estimated to have caused losses of us $4.9 billion in terms of output. Adding the losses suffered by the informal sector can easily double this figure. Moreover, the state exchequer has been burdened with a huge fiscal deficit of us $2.2 billion in the three years since the calamity.

Recovery has, however, been rapid. This has been helped in good measure by generous aid from international institutions and non-governmental organisations (ngos). The World Bank alone has put up us $257 million in the first phase of recovery, ending March 2003. This sum is meant for rehabilitation and reconstruction purposes. The Bank has also lent us $442 million for long-term recovery from the calamity