Relevance: GS-2/GS-3 (Federalism; Disaster Management) | Source: The Hindu, NDMA Act 2005
The July 2024 Wayanad landslide (≈300 deaths) exposed a deep fiscal mismatch: Kerala sought ₹2,200 crore for relief and reconstruction, while the Union immediately approved only ₹260 crore.
This pattern, repeated across States, highlights structural weaknesses in India’s disaster-finance architecture and the fraying edges of cooperative federalism.
How India’s Disaster Financing Works
- State Disaster Response Fund (SDRF): Jointly funded by Centre–State (75:25; 90:10 for Himalayan and North-eastern States). Used for immediate relief.
- National Disaster Response Fund (NDRF): Fully Centrally funded. Supplements SDRF for major calamities.
- Disaster Management Act, 2005: Legal framework empowering the Centre to assist States when resources fall short.
Core Problems Revealed
- Outdated norms: Compensation ceilings unchanged for years, not aligned with today’s reconstruction costs.
- Ambiguous disaster categories: “Severe disaster” classification unclear, delaying NDRF aid.
- Excessive red tape: Multiple-stage clearances, state memoranda, and central assessments slow transfers.
- Weak allocation formula: Population/geography-based norms ignore vulnerability, hazard intensity, and poverty.
- Political friction: Discretionary approvals erode federal trust and delay urgent support.
Global Lessons & Reform Options
| Country / System | Key Feature | Why Relevant for India |
|---|---|---|
| United States (FEMA) | Data-driven disaster triggers | Enables rapid, neutral federal support |
| Mexico (FONDEN) | Automatic payouts based on rainfall/fatality indicators | Reduces discretion and delays |
| Philippines (Quick Response Funds) | Pre-authorised funds with objective criteria | Ensures fast, accountable disbursal |
Suggested Reforms for India
- Objective disaster triggers: Rainfall thresholds, casualty ratios per million population, or loss-to-GSDP indicators.
- Shift to grant-based support: Avoid debt-creating disaster assistance.
- Update compensation norms to reflect current economic realities.
- Automatic advance releases to SDRF during high-risk seasons for liquidity.
- Vulnerability-weighted allocation index: Combine hazard exposure, poverty, and adaptive capacity.
- Enhance State control over operational spending; Centre limited to verification and top-ups.
A rules-based, trigger-driven funding model would strengthen both disaster preparedness and cooperative federalism, replacing ad-hoc decisions with predictable, science-based support.
UPSC Mains Question
“Examine the limitations of India’s disaster financing framework. How can rule-based transfers strengthen both disaster response and federal cooperation?”
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