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Financial Arrangements


The financing of disaster relief has been an important aspect of federal fiscal relations. The primary responsibility for undertaking rescue, relief, and rehabilitation measures during a disaster lies with the State Governments. The Union Government supplements their efforts through logistic and financial support. The DM Act 2005 provides the legal framework for disaster management and all related matters, including the financial aspects. The Act envisages the constitution of two types of funds: response and mitigation, which are to be set up at the national, state and district levels. Thus,

for disaster response, the Act envisages a National Disaster Response Fund, a State Disaster Response Fund in each State and, within the States, a District Disaster Response Fund in each district. Similarly, the Act envisages a National Disaster Mitigation Fund, State Disaster Mitigation Fund and District Disaster Mitigation Fund for disaster mitigation. Section 47 of the DM Act 2005, pertaining to setting up of the National Disaster Mitigation Fund, has not been notified by the Government so far. The financing of the entire disaster management cycle will be as per norms set by the Government of India. The disaster risk reduction will be achieved by mainstreaming the requirements into the developmental plans.


Accordingly, the broad  objectives of the NDMP are:

1) Improve the understanding of disaster risk, hazards, and vulnerabilities

2) Strengthen disaster risk governance at all levels from local to centre

3) Invest in disaster risk reduction for resilience through structural, non-structural and financial measures, as well as comprehensive capacity development

4) Enhance disaster preparedness for effective response

5) Promote “Build Back Better” in recovery, rehabilitation and reconstruction

6) Prevent disasters and achieve substantial reduction of disaster risk and losses in lives, livelihoods, health, and assets (economic, physical, social, cultural and  environmental)

7) Increase resilience and prevent the emergence of new disaster risks and reduce the existing risks

8) Promote the implementation of integrated and inclusive economic, structural, legal, social, health, cultural, educational, environmental, technological, political and institutional measures to prevent and reduce hazard exposure and vulnerabilities to disaster

9) Empower both local authorities and communities as partners to reduce and manage disaster risks

10) Strengthen scientific and technical capabilities in all aspects of disaster management

11) Capacity development at all levels to effectively respond to multiple hazards and for

community-based disaster management

12) Provide clarity on roles and responsibilities of various Ministries and Departments involved in different aspects of disaster management

13) Promote the culture of disaster risk prevention and mitigation at all levels

14) Facilitate the mainstreaming of disaster management concerns into the developmental planning and processes

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