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Disaster Management

1. Disaster Finance in India: Population Count vs Real Disaster Risk

Context: The disaster funding framework proposed under the 16th Finance Commission (FC) has raised serious concerns regarding the way disaster risk is assessed and funds are distributed among States and UTs.

Out of 36 States/UTs, 27 face recurring disaster risks.

India’s vulnerability profile remains high:

• 58% land area prone to earthquakes
• 12% vulnerable to floods
• 68% susceptible to drought
• around 5,700 km coastline exposed to cyclones

This makes disaster finance a crucial component of India’s climate governance.

Meaning of Disaster Finance

• Disaster finance refers to the institutional and fiscal arrangements used for financing prevention, preparedness, response, and recovery from disasters.
• With increasing climate-related disasters, it has become an important pillar of fiscal federalism and disaster governance.
• India follows a federal, rule-based financing mechanism, mainly guided by recommendations of the Finance Commission.

Institutional Framework

Constitutional and Legal Basis

• Article 280: Finance Commission recommends disaster-related grants
• Disaster Management Act, 2005: Provides the legal framework and establishes:
  • National Disaster Management Authority
  • State Disaster Management Authorities

Key Funds

1. State Disaster Response Fund (SDRF)

Primary fund used for immediate disaster relief measures, such as:

• evacuation
• temporary shelters
• food and relief support
• rescue operations

Funding pattern:

• Centre: 75% for general states
• Centre: 90% for special category states
• remaining share by states

2. National Disaster Response Fund (NDRF)

Supplementary fund activated in case of severe disasters when SDRF proves inadequate.

3. Mitigation Funds

• National Disaster Mitigation Fund (NDMF)
• State Disaster Mitigation Fund (SDMF)

These are meant for long-term risk reduction, but are often underutilized.

Role of Finance Commission

Every Finance Commission decides:

• total disaster allocation
• state-wise distribution formula

Recent Trend

• 15th FC → additive approach
• 16th FC → Disaster Risk Index (DRI)

16th FC’s New Formula

The 16th FC adopted a multiplicative Disaster Risk Index:

DRI = Hazard × Exposure × Vulnerability

This replaces the earlier additive method and is closer to the global understanding of disaster risk.

Components of DRI

• Hazard: The Commission expanded the hazard variable to include ten specific disasters:flood, drought, cyclone, earthquake, landslides, hailstorms, cold wave, cloud burst, lightning, and
• Exposure: It is measured using the projected populationfor October 2026. FC tilises population as a surrogate for exposure because it is highly correlated with the crops and infrastructure susceptible to damage.
• Vulnerability: It is calculated using the per-capita income of States; Susceptibility to damage.

Key Structural Concerns

Incorrect Measurement of Exposure

• The current formula uses total state population as exposure.
• However, as per the IPCC Sixth Assessment Report, exposure means presence of people and assets in places that are actually hazard-prone
• Thus, total population does not accurately represent disaster exposure.

Example

• Odisha → high cyclone risk but lower population → lower DRI
• UP / Bihar → large population but comparatively lower hazard → higher DRI

This distorts actual risk assessment.

Weak Proxy for Vulnerability

Using only inverse per capita NSDP as vulnerability is insufficient.

It reflects economic capacity but ignores:

• housing quality
• health infrastructure
• early warning systems
• social inequalities
• local preparedness

Example

During the 2018 Kerala floods, despite damage of nearly ₹31,000 crore, the state received a lower vulnerability score due to higher income levels.

Broader Implications

The current formula leads to:

• distorted fund allocation
• nearly 20 states losing share
• penalisation of better-prepared states
• reward for demographic size rather than actual risk

This weakens incentives for resilience building.

What Should Change?

Better Exposure Indicator

Exposure should be based on population living in hazard-prone zones, not total population.

Possible data sources:

• Vulnerability Atlas by BMTPC
• Census block-level data

Composite Vulnerability Index

A broader index may include:

• kutcha housing share
• dependence on agricultural labour
• health infrastructure density
• insurance penetration (PMFBY)
• effectiveness of early warning systems

Institutional Reform

National Disaster Management Authority should publish an Annual State Disaster Vulnerability Index and standardise methodology across Finance Commissions.

Conclusion

The existing disaster finance framework is theoretically sound but practically flawed.

By equating exposure with population and vulnerability with income, it oversimplifies a highly complex risk landscape.

For a climate-vulnerable country like India, fund allocation must reflect actual spatial risk, not merely population numbers.

Energy

2. Energy Statistics India 2026

Context: The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) has released the annual report “Energy Statistics India 2026”.

About the Report

The publication presents a comprehensive and integrated database on India’s energy sector.

It includes information related to:

• reserves
• installed capacity
• production
• consumption
• import and export
• across all major energy commodities.

The report also contains:

• statistical tables
• graphical representations
• sustainable energy indicators aligned with international standards

Major Highlights

Growth in Energy Supply

• During FY 2024–25, India recorded a 95% increase in Total Primary Energy Supply (TPES) compared to the previous year.
• This reflects continued expansion of economic activity and rising energy needs.

Renewable Energy Potential

India’s total renewable energy generation potential stood at 47,04,043 MW as on 31 March 2025.

Among renewables:

• solar energy contributes nearly 71%
• followed by wind energy
• and large hydro projects

State-wise Concentration

More than 70% of renewable potential is concentrated in six states:

• Rajasthan
• Maharashtra
• Gujarat
• Andhra Pradesh
• Karnataka
• Madhya Pradesh

Renewable Electricity Generation

• Electricity generation from renewable sources (both utility and non-utility)
• has shown strong growth with a CAGR of 9.17% over the years.
• This indicates rapid scaling up of clean energy infrastructure.

Per Capita Energy Consumption

• Per capita energy consumption grew at a CAGR of 1.89% during FY 2015–16 to FY 2024–25.
• This shows increasing industrialisation, urbanisation, and household demand.

Dominant Source of Energy

• Despite renewable growth, coal continues to remain the dominant source of India’s total energy supply.
• This highlights India’s continuing dependence on fossil fuels.

Rising Financial Flows

Credit flow to the energy sector increased significantly:

• ₹1,688 crore in 2021
• ₹10,325 crore in 2025

This represents a more than six-fold increase.

Key Takeaways

• India’s energy demand is steadily rising
• renewable energy potential is substantial, especially solar
• strong regional concentration requires better grid connectivity
• clean energy expansion reflects policy support
• coal dependence remains a major challenge
• rising investment indicates growing investor confidence

Conclusion

The report highlights India’s dual energy reality:

• rapid progress in renewable expansion
• continued structural dependence on coal

This underlines both the opportunities and challenges in India’s clean energy transition.

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