DISASTER RISK REDUCTION:

ROLE OF FINANCIAL

INSTITUTIONS

Subrata Nath

Director

Dept. of Agriculture & Cooperation

Min. of Agriculture, Govt. of India

05-12-2014

Disaster Losses in India:

about 0.3% of GDP

CURRENT APPROACH

Disaster Management -Relief & Rescue

Risk Management - Mainstreamed in

Developmental Programmes

Risk Reduction - Subset of Risk Management

Disaster Management

(DM)

Disaster Risk Management

(DRM)

Disaster Risk Reduction

(DRR)

FINANCING DISASTER RELIEF: DISASTER

MANAGEMENT

Post Disaster

Subset of Disaster Management

National & State Disaster Response Fund

(NDRF/SDRF)

Rs. 10,000 crore (USD 1.6 Billion) per annum

provided as central assistance to States for

disaster relief

Crop Insurance about USD 1.2 Billion per

annum

States spent from their own resources too

FINANCING DISASTER MITIGATION

Disaster Risk Management (DRM)

Many Central and State Schemes for

Drought mitigation, Flood Control measures

etc.

Flood Control

During XI Plan, Government of India had

launched Flood Management Programme

under which the central assistance of Rs.

3566 crore (USD 0.6 Billion) during XI

Plan.

Outlay for Flood Control during XII Plan is

Rs. 10,000 crore (USD 1.6 Billion)

FINANCING DISASTER MITIGATION

Drought Mitigation (Major-Medium-Minor

Irrigation, Water harvesting, Soil moisture

conservation, Watershed management)

IWMP: Rs. 3500 crore (USD 0.6 Billion) per

annum

AIBP: Rs. 6300 crore (USD 1 Billion) per

annum

NMSA-RKVY: Rs. 11,500 crore (USD 1.8

Billion) per annum (Rs. 2500 crore for DRM)

MGNREGA: Rs. 33,300 crore (USD 5 Billion)

per annum

Plus State funding from their own resources

DISASTER RISK REDUCTION (DRR)

Hyogo Framework of Action (HFA) 2005-2015 :

Effective integration of disaster risk reduction into

sustainable development policies, planning and

programming at all levels, with a special emphasis on

disaster prevention, mitigation, preparedness and

vulnerability reduction

Mainstreaming DRR -incorporating into

development policy and practice.

Integration of DRR measures into ongoing

flagship programmes of Government of India is

being used as an entry point for mainstreaming DRR

in development plans

No separate programme for DRR (treated as subset of

DRM), which is not uncommon !

FINANCING DISASTER RISK REDUCTION (DRR)

POST DISASTER FINANCING –FOR

INDIVIDUALS

Guidelines of Reserve Bank of India

Debt rescheduling – Short term to

medium term

Interest subvention- for affected

year

Loan waiver- Complete or Partial,

both at Federal and State Level

Crop Insurance

BEYOND PUBLIC FINANCING : POTENTIAL AREAS

Insurance (except Crop

Insurance)

Micro Finance & Micro

Insurance

Multi-lateral financing

Private Investment

Estimates suggest that only about 10-15% of

economic losses are funded for through

NDRF, SDRF, expenditure incurred by

States and insurance claims.

While in developed countries, 40-66% of

economic losses caused by natural disasters

are insured, in India the proportion is only

15.7%.

Although, Thirteenth Finance Commission

took cognisance of insurance as means for

disaster related expenditure, nothing much

has happened in this direction so far.

ECONOMIC LOSSES & INSURANCE

MICRO FINANCE AND MICRO INSURANCE

SCOPE FOR MULTI LATERAL FUNDING

Established in 2006 by major donors, the

UN, and the World Bank, the Global

Facility for Disaster Reduction and

Recovery (GFDRR) is a partnership with

a mission to mainstream disaster risk

reduction (DRR) and climate change

adaptation (CCA) in country

development strategies by supporting a

country-led and managed

implementation of the Hyogo Framework

for Action (HFA).

INTEGRATING PRIVATE INVESTMENT

Integrating disaster risk reduction into

investment decisions is the most cost effective

way to reduce risk.

Currently, institutional investors manage

assets worth more than $80 trillion globally,

much of it with limited consideration to

disaster risk. (UNISDR, Oct, 2014)

India is one of the preferred destination of

global investment

SUMMING UP!

Disaster Relief

Disaster Risk Reduction (DRR) as subset of

Disaster Risk Management (DRM)

DRM mainstreamed in Developmental

Programme and Polices

Scope of Financing DRR

Insurance

Micro-Finance

Multi-lateral funding

Private Investment

THANKS SUBNATH@GMAIL.COM