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The financial framework for Disaster Management

Financial Mechanism under Disaster Management Act, 2005: National and State Disaster Response Funds.

Disaster Management deals with managing resources and responsibilities in case of emergencies. It looks at dealing with calamities in case of natural and man-made disasters. Many provisions are made by the Government to create robust Disaster Management policies. Read on to learn more about the financial framework for Disaster Management.

Financial Mechanism Under Disaster Management Act,2005

National Disaster Response Fund

  • National Calamity Contingency Fund (NCCF) was named National Disaster Response Fund (NDRF) under the arrangements of the DM Act in 2005.
  • The fund is defined under Section 46 of the DM Act, 2005.
  • It is constituted under the Public Account of India under “reserve funds not bearing interest.”
  • The Central Government administers it for meeting the expenditure for emergency response, relief, and rehabilitation due to any disaster.
  • It supplements the State Disaster Response Fund (SDRF) if a severe disaster and adequate funds are not available in the SDRF.
  • Lately, The Central Government has permitted contributions from any individual or institution in the National Disaster Response Fund, as per Section 46(1)(b) of the Disaster Management (DM)act, 2005.
  • The Agricultural Department and Cooperation control severe disaster relief activities for crises associated with hailstorms, pest attacks, droughts, and cold waves/frost. In contrast, the rest of the natural disaster crises are monitored by the Ministry of Home Affairs (MHA).
  • The National Disaster Response Fund is audited by the Comptroller and Auditor General (CAG).
  • The main task of NDRF is to provide a specialist response in case of disasters which broadly covers:
  • Assistance to civil authorities to distribute relief material.
  • First medical response to victims.
  • Capacity building.
  • To conduct mock exercises in coordination with other stakeholders for a well-coordinated response during disasters.
  • To instruct the State Disaster Response Force (SDRF), NGOs, and Communities in disaster management.

State Disaster Response Fund

  • Established under Section 48 (1) (a) of the DM Act, 2005, it is the primary fund available with State Governments to take immediate action when they know about disasters.
  • The Central Government provides 75% of SDRF share for general category States and Union Territories and 90% for special category States and Union Territories. (i.e., North-eastern states, Sikkim, Himachal Pradesh, Uttarakhand, Jammu, and Kashmir).
  • The yearly Central commitment is delivered in two equivalent portions according to the suggestion of the Finance Commission.
  • SDRF can be utilised uniquely for meeting the use for giving quick help to disaster-affected people.
  • Local Disaster: A State Government may utilise 10% of the SDRF to provide immediate relief to the people affected by the natural disaster within the local context in the State, which is excluded in the notified list of Disasters of the Ministry of Home Affairs. It is subjected to the condition that the State Government has listed. The state-specific natural disasters and informed transparent and clear norms and guidelines for such disasters with the approval of the State Authority, which is the State Executive Authority ( SEC)

Finance Commission recommendations on Disaster Management

  • The 15th FC endorsed establishing National and State Disaster Management Funds (NDMF & SDMF) for the local level alleviation activities. It has also recommended retaining the existing cost-sharing mechanism between the State and Centre to fund the SDMF (new) and the SDRF (existing). 
  • The terminology “Disaster Risk Management” instead of “Disaster Management” has been introduced. This indicates an advanced perspective of managing disaster risk finance that isn’t a response centre but proactive and preparedness-based.
  • ‘River erosion’ is the term that has been recently introduced in the Finance Commission report. This might mark the beginning of systematic efforts to label ‘riverine erosion’ as a significant hazard affecting vulnerable communities.

Conclusion

The strong financial support during Natural disasters results in resilient strategies to fight back. It majorly covers and connects agriculture, urban development, social protection etc.