India's Disaster Response Financing Framework
Why in news?
India's Disaster Response Financing Framework has faced recent criticism for funding delays, centralization, and outdated norms, particularly after events like the Wayanad landslides in Kerala, where assessed needs outstripped released funds.
About India's Disaster Response Financing Framework
India's Disaster Response Financing Framework is a structured system established under the Disaster Management Act, 2005, designed to ensure timely and adequate financial support for disaster relief and recovery at both state and national levels.
Key Components
- State Disaster Response Fund (SDRF): This is the primary fund for state governments, jointly financed by the Centre and States in a 75:25 ratio for most states, and 90:10 for Himalayan and North-Eastern states.
- National Disaster Response Fund (NDRF): Fully funded by the Union government, NDRF supplements SDRF when a disaster is classified as "severe" and SDRF funds are insufficient.
- Disaster Risk Management Funds (NDRMF & SDRMF): The 15th Finance Commission recommended expanding the framework to include funds for disaster mitigation, renaming the combined corpus as National and State Disaster Risk Management Funds.
Institutional and Operational Features
- Funding allocation is based on recommendations of the Finance Commission, considering population and area, though recent critiques highlight the need for hazard-specific criteria.
- The process for releasing funds involves sequential clearances, which can sometimes cause delays. The criteria for classifying a disaster as "severe" remain ambiguous, leading to discretion in NDRF eligibility.
- The framework now encourages a bottom-up approach, with greater roles for local governments (PRIs) in relief, recovery, and mitigation activities.
Way forward
- Adopt trigger-based fund releases using rainfall thresholds, satellite damage assessments, and loss-to-GSDP ratios for faster aid.
- Update outdated norms like compensation ceilings (e.g., ₹4 lakh per life lost) and define "severe" disasters clearly in DM Act.
- Empower states, districts, and local bodies (PRIs/ULBs) with flexible SDRF/SDRMF use and reduce central discretion.
- Boost mitigation funding (e.g., via SDMF/NDRMF) with proactive tools like catastrophe bonds and micro-insurance.
- Link allocations to hazard-specific risks, not just population/area, via 16th Finance Commission reforms.
- Promote rule-based, transparent systems with outcome tracking per Sendai Framework.
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