Kiran Desai says initially "no one wanted" her book, which she finished after toiling for nearly eight years.
Twelve people were washed away by flood waters of the Godavari river, which is 16 feet above the danger level.
Arundhati Roy has rejected the award in a single-page fax message, Akademi Secretary K Sachidanandan said.
Bishan Kaur, mother of Kanshi Ram, had filed a petition alleging that her son was kept in illegal custody by Mayawati.
