What Happened
- An opinion piece in The Hindu raises structural concerns about the 16th Finance Commission's disaster funding formula, arguing that using population as the primary proxy for disaster exposure systematically underserves the most hazard-prone states.
- The core critique: high-risk, low-population states (mountain and coastal states) receive disproportionately less disaster funding compared to high-population, lower-per-capita-risk states.
- The 16th Finance Commission (2026–31) recommended a total corpus of ₹2,04,401 crore for State Disaster Response Funds (SDRF) and ₹79,406 crore for the National Disaster Response Fund (NDRF) for the five-year period.
- The Commission uses a Disaster Risk Index (DRI) combining Hazard, Exposure (measured by projected October 2026 population), and Vulnerability (measured by per-capita income).
- Critics argue population is an inadequate proxy for exposure — a small mountain village downstream of a GLOF path faces far higher per-capita risk than an equally populated area in a low-hazard plains district.
- The article calls for incorporating asset value at risk, infrastructure density, and spatial hazard intensity maps into the DRI formula.
- The 16th Finance Commission did expand the hazard variable from earlier commissions to include 10 disaster types: flood, drought, cyclone, earthquake, landslides, hailstorms, cold waves, cloudbursts, lightning, and heatwaves.
Static Topic Bridges
Finance Commissions and Disaster Funding — Constitutional Basis
The Finance Commission is constituted under Article 280 of the Constitution every five years to recommend the distribution of Central taxes between the Union and States, as well as grants-in-aid to States. The Disaster Management Act, 2005 (Sections 46 and 48) mandated the creation of the National Disaster Response Fund (NDRF) and State Disaster Response Funds (SDRF) as the principal financial mechanisms for disaster response. Finance Commissions since the 12th (2000–05) have been making recommendations for SDRF corpus and sharing ratios between Centre and States.
- SDRF constituted under Section 48(1)(a) of the Disaster Management Act, 2005
- NDRF constituted under Section 46 of the Disaster Management Act, 2005
- Centre-State SDRF sharing: 75:25 for general states; 90:10 for North-Eastern and Himalayan states
- NDRF is funded entirely by the Central Government
- 15th Finance Commission (2021–26): allocated ₹32,030.60 crore for State Disaster Mitigation Funds
Connection to this news: The structural problem identified is about how the SDRF corpus is distributed among states — the formula determines which states get more, making the DRI methodology critically important for mountain states like J&K, Himachal Pradesh, Uttarakhand, Sikkim, and coastal states like Odisha and Andhra Pradesh.
Disaster Risk Index — Conceptual Foundations
The Disaster Risk Index (DRI) used by the 16th Finance Commission builds on the standard risk formula: Risk = Hazard × Exposure × Vulnerability. "Hazard" measures the probability and intensity of a disaster event. "Exposure" measures the assets, people, and livelihoods in the hazard path. "Vulnerability" reflects the inability of an exposed element to absorb, resist, and recover from disaster impacts. The critique in the article targets the exposure variable — population counts do not capture the spatial distribution of infrastructure (roads, bridges, buildings, hydropower dams) or economic assets actually in hazard zones.
- 16th Finance Commission expanded the hazard variable to include 10 disasters (vs. fewer in earlier commissions)
- Population used as the exposure surrogate due to its correlation with crops and infrastructure nationally
- Vulnerability measured using state-level per-capita income (average of 2018–19 to 2023–24, excluding 2020–21)
- Sendai Framework calls for "risk-informed" investment decisions using multi-hazard risk assessments
Connection to this news: The article argues that while expanding the hazard list is progress, using aggregate state population as the exposure variable is a blunt instrument that fails to capture the reality of localized high-risk corridors in hazard-prone mountain and coastal geographies.
Sendai Framework and India's DRR Commitments
India adopted the Sendai Framework for Disaster Risk Reduction 2015–2030 at the Third UN World Conference on DRR in Sendai, Japan. The framework sets targets including substantially reducing the economic losses attributable to disasters by 2030, measured against baseline figures of 2005–15. India's National Disaster Management Plan (NDMP), updated in 2019, aligns with Sendai priorities. A key Sendai principle is to make disaster risk reduction part of public investment planning — meaning infrastructure budgets, housing approvals, and development grants should reflect spatial risk, not just population.
- Sendai Framework period: 2015–2030; four priorities and seven global targets
- India was the first country to develop a post-Sendai NDMP
- Sendai Priority 3: "Investing in disaster risk reduction for resilience" — implies risk-adjusted public spending
- The DRI formula directly affects whether mountain states can fund adequate early warning systems and infrastructure hardening
Connection to this news: The op-ed's argument is fundamentally a Sendai-aligned argument — disaster funding should be proportional to actual risk, not to population size, to achieve meaningful resilience investment in the most vulnerable geographies.
Federal Finance and Horizontal Devolution Principles
Horizontal devolution — the distribution of resources among states — involves balancing equity and efficiency. Finance Commissions have historically used criteria such as area, population, income distance (the gap between a state's per-capita income and the national average), and forest cover as proxies for fiscal need and environmental services. Disaster risk is a newer criterion. The 15th Finance Commission, following the COVID-19 pandemic, also included a demographic performance criterion. The challenge with disaster risk as a criterion is developing an objective, quantifiable, and manipulation-resistant index that treats geographically small but extremely hazard-prone states fairly.
- Horizontal devolution criteria used by 15th Finance Commission: income distance (45%), population (15%), area (15%), forest and ecology (10%), demographic performance (12.5%), tax effort (2.5%)
- 16th Finance Commission's overall tax devolution share to states: maintained at 41%
- Mountain and North-Eastern states benefit from the 90:10 Centre-State SDRF sharing ratio
- The article proposes integrating GIS-based hazard intensity maps and asset-level exposure data into the DRI
Connection to this news: The SDRF allocation methodology is one of the few places where hazard geography intersects with fiscal federalism — getting this formula right has direct consequences for states like Uttarakhand or Manipur that are small in population but large in disaster risk.
Key Facts & Data
- 16th Finance Commission period: 2026–31
- Recommended SDRF corpus: ₹2,04,401 crore (state funds) + ₹79,406 crore (NDRF)
- DRI components: Hazard × Exposure (population) × Vulnerability (per-capita income)
- 10 disasters now covered in hazard variable (expanded from earlier commissions)
- Centre-State SDRF ratio: 75:25 (general); 90:10 (North-Eastern and Himalayan states)
- Disaster Management Act, 2005: Sections 46 (NDRF) and 48 (SDRF)
- Finance Commission: Article 280 of the Constitution
- 15th Finance Commission SDMF allocation: ₹32,030.60 crore (2021–26)