From Relief to Resilience: Rethinking India’s Disaster Finance Architecture
The impact of climate change on extreme weather events (EWEs) is now well established in scientific literature. Among the various slow-onset and quick-onset events, floods are among the most devastating for India, in terms of the economic damage and disruptions they cause within a short period. EM-DAT data reveal that floods constituted over 63 per cent of total costs imposed by all disasters in India for the period 1992-2022. As climate change intensifies disaster risks, domestic fiscal policies must address the states’ increasing vulnerabilities. Currently, Relief Commissioners and State Disaster Management Authorities (SDMAs) play a crucial role in coordinating post-disaster relief and disbursing compensation from the State Disaster Relief Fund (SDRF). However, the existing institutional architecture is predominantly oriented towards response and relief, rather than building pre-disaster resiliency. That said, appreciable efforts are being made to overturn this paradigm. The 15th Finance Commission, in a departure from the previous expenditure-based approach, recommended the creation of a disaster mitigation fund, along with new criteria for allocating disaster risk management funds based on a combination of factors, including hazard risk, exposure, vulnerability, and capacity. The 16th Finance Commission’s terms of reference include reviewing the current disaster financing arrangements, but the correct estimation of disaster-induced losses must precede any such exercise to understand the scale of the finance gap. [Read more…]
