chapter 6 financial implications of disasters and role of...

Chapter 6

Financial Implications of Disasters and Role of Government

(Analysis of Data)

6.1 Introduction

It is difficult to forecast the extent of the financial consequences a major natural disaster

can bring about. The financial consequences are rarely considered beyond what the cost will be

to rebuild. That's a grave problem for the victims of natural disasters because it's the economic

fallout that leaves some of the longest-lasting marks. Although we cannot completely avoid

disaster, we can better prepare for it. Understanding the financial implications of a disaster is

the first step toward that.

The financial requirements with reference to disasters exist in both pre disaster as well as

post disaster phases. In case of lack of effective planning, they result in an additional financial

burden not only on Government but on all the other stake holders such as Corporate sector,

NGOs and most importantly the citizens. Hence it is essential to study the present funding

mechanism and implement measures to remove the weaknesses and improve the effectiveness

in disaster financing.

This chapter analyses the funding requirements for various reasons before and after the

occurrence of disasters along with the current governmental funding mechanism to finance

disaster management in India. On the basis of a primary survey, it further suggests measures to

bring effectiveness in disaster management activity aiming at financial crisis management with

reference to disasters. It also highlights the drawbacks of the current system which is more

focused on ex-post strategies.

The United Nations Economic and Social Survey of the Asia Pacific, a report

released in May 2012 highlighted the importance of disaster preparation that ‘Countries across

the region need to invest more in disaster risk reduction as an essential component of their

long-term development strategies. This will involve protecting social and economic assets

from floods and other disasters, particularly in those areas where rapid economic growth has

heightened the risks. It also underscored the importance of: developing early-warning systems;

maintaining and restoring ecosystems that buffer the impact of natural hazards; and providing

alternatives for those living in high-risk areas.’

Financial Crisis Management with reference to disasters mainly involves the following:

• Financial implications at Preparedness and prevention phases before the

occurrence of disaster

• Post Disaster Financial crisis management at rehabilitation phase

6.2 Broad Financial Implications That are Required to be Taken into Consideration at

Preparedness and Prevention Phases before the occurrence of disaster:

1) Analysis of alternative plans from the financial angle, including the aspects such as,

investment required for preparedness, prevention and immediate response etc.

2) Personnel training costs

3) Costs of initiatives to improve the overall resiliency level of citizens e.g. awareness campaigns

4) Costs of procurement and maintenance of equipments needed for disaster risk reduction e.g.

fire extinguishers

5) Cost of building structures to reduce disaster risk reduction e.g. shelters for safe evacuation

6) Analysis of alternative plans from the financial angle, including the aspects such as methods

of damage estimation, costs for disaster mitigation and cost of search and rescue operations

7) Analysis of alternative plans from the financial angle, in regard to estimates of collateral

damages and damage control expenditures to be directly incurred

8) Costs of providing emergency sanitation (including examination of alternate strategies)

9) Cost of providing emergency medical services and preventive healthcare

10) Procedures for procurement, storage and accounting for rehabilitation material including

gifts, donations etc. and procedures for on the spot checking of material

11) Cost benefit analysis of alternative provisions for Transport and Communication

12) Evaluation of Utility services with respect to costs

13) Provision of supply chains and costs thereof, methods of monitoring and accounting

14) Procedures for obtaining various financial clearances and subsidies/relief

15) Examination of the current and proposed cash expenditures for preparedness, prevention and

mitigation

16) Examination of the requirement for supplies and equipments

17) Financial control over the expenditures on logistics

The International Strategy for Disaster Reduction (ISDR) defines recovery as the “decisions and

actions taken after a disaster with a view to restore or improve the pre-disaster living conditions

of the stricken community, while encouraging and facilitating necessary adjustments to reduce

disaster risk”.

6.3 Broad Financial Implications That are Required to be Taken into Consideration From

the Point of View of Post Disaster Financial Crisis Management at Recovery/Rehabilitation

Phase:

1) Reassessment of economic and financial impacts

2) Reallocation of budgetary resources and funds

3) Assistance strategy for the affected country

4) Risk management strategies at least for the subsequent few years

5) Funding to be broadened with insurance and other mechanism of loss for different layers of

loss.

6) Natural hazard risk management to be integrated into longer-term national investment

policies and development strategies

7) Making available High-quality, reliable scientific disaster related information and

forecasting

8) Use of the information to support food security and improved management of agricultural

and other renewable natural resources.

9) Use of the information to build resilience to climatic changes and extreme events.

10) Ensuring that there are adequate complementary monitoring and dissemination programs at

the national level

11) Domestic macroeconomic policies such as stabilization or structural economic reform

programs

12) Medium-term economic and social strategies such as poverty reduction

13) Domestic sector-wise policies such as those concerned with food marketing, foreign

exchange management, or stockpiling of food grains

14) Deliberate changes in policy in response to a disaster—for instance, to control inflation,

15) Strategy to reinvestment or generate revenue to meet the costs of rehabilitation.

16) The amendments in external policy environment, to the extent that it influences the pattern

of productive activities and thus affects underlying vulnerability. E.g. banana production

has been encouraged by preferential trade arrangements in Dominica, a small Caribbean

island which is prone to tropical storms and hurricanes.

17) Coincidental fluctuations in primary export and import prices (e.g., of cereals or oil), which

may lessen or exacerbate impacts on the balance of payments and inflation

18) A country’s significance in specific export markets e.g. The shift from agricultural to

manufacturing exports, and thus to an apparently less hazard-vulnerable form of economic

activity

19) The timing and nature of other shocks, especially conflict—for example, the independence

struggle in Bangladesh and the war in Mozambique that destabilized Malawi’s transport

links and brought an influx of refugees.

20) The incidence of health hazards. E.g. the HIV/AIDS pandemic and the resurgence of

malaria and tuberculosis are undermining coping strategies, eroding human capital, and

placing potentially considerable strain on public finances in southern and eastern Africa.

21) Financial reassessments of the post incident management plans with regard to data collected

during mitigation phase

22) Examination from the financial angle of methods and procedures governing the distribution

of money etc. to the affected area and installation of appropriate procedures to control

leakage and pilferage and to ensure efficient allocation of rehabilitation funds.

23) Procurement, storage and accounting of rehabilitation material

24) Existence of a budgetary control system to make a comparative study with similar disaster

situations and to reconcile the variances.

25) The recovery of insured losses and the treatment of uninsured losses.

26) Appropriate allocation of the financial resources(It is important because wastage of

resources during the mitigation phase will deny those resources to the affected population

during the post incident phase and wastage of resources during the post incident phase will

mean denying those resources to the economy as well as to the next disaster.)

6.4 Caution to be Taken While Carrying out the Activities at Both Pre-Disaster and Post-

Disaster Phases:

At both the above phases, while carrying out the activities, cost competitiveness aspect is

required to be looked into without distorting the very purpose of planning. It is required to see

how the costs are related to the intensity of disaster and if the actual intensity of disaster

exceeded the plans. Also the vulnerability of the population with reference to the aspects such as

density of population, geographical conditions and socio economic conditions etc. are required to

be looked into. The verification parameters for adherence to the plan parameters are required to

be set.

The damage caused by floods, earthquakes and cyclones is on a much larger scale than

other disasters and recovery after these disasters poses a challenge. In disasters like drought, the

relief phase is prolonged and since there is no damage to the infrastructure and property, the

rehabilitation is confined to restoration of livelihoods which can get subsumed in normal

development programmes. Rehabilitation following disasters such as landslides and avalanches

is localised and is of a similar nature as in earthquakes but on a smaller scale. Finding safer sites

near such locations often poses challenges and resistance.

6.5 Case Studies to Highlight Effectiveness of Preparedness Measures Before Disasters in

Comparison with Rehabilitation Measures Post Disaster Occurrence.

Case study 1

If we compare the disasters of similar magnitude in USA and Japan with that of India it is

found that the loss of lives in USA and Japan are much less as compared to that of India. The

factors influencing reduced loss is attributed to the better preparedness in USA and Japan.

Comparison among India, Japan & USA on death in Earthquake of similar magnitude

Case study 2

Recent history shows that low-income countries can reduce loss of life with effective

preparations against natural disasters. Cyclone Sidr in Bangladesh killed far fewer people in

2007 than did Cyclone Nargis in Myanmar a year later. The financial loss and loss of lives in the

case of Bangladesh was also much less than that in Myanmar.

Comparison of differential impacts of cyclones in Bangladesh (2007) and Myanmar (2008)

Bangladesh: Cyclone

Sidr, 2007

Myanmar: Cyclone

Nargis, 2008

Tidal wave (and storm

surge)

5 to 6 metres 3.5 to 7.0 metres

Wind speed 240 km/hr 255 km/hr

Population evacuated 3 million None

Deaths 3,406 84,537

Missing 1,001 53,836

Population “severely”

affected

1 million 2.4 million

Table 6.1

Total losses and damage US$1,674 million US$4,134 million

Human Development

Index (2007)

140 132

Per capita GDP (2007

values)

PPP$1,400 PPP$1,900

Population below poverty

line (2004)

45% 33%

(Source: Natural disasters - Statistical Yearbook for Asia and the Pacific 2011.htm)

Case Study 3

Haiti which is considered to be the poorest country in the western hemisphere had to face

a major earthquake in January 2010.

Eric Calais, a seismologist and senior science adviser with UNDP said in the press conference on

Haiti’s Earthquake Risk Reduction Plans that Haiti — along with the entire island of Hispaniola

— was especially vulnerable to earthquake, as it sat directly on a seismic plate boundary.

Preparedness was often lacking in the region. He said that, had Haiti been as prepared for an

earthquake as Japan, the number of casualties could have been reduced.

Comparison between earthquake impact on Haiti and Japan

Name of

country Disaster Magnitude Casualties GDP(PPP)(2009)

Haiti Earthquake in

2010 7 222570 1339

Japan Earthquake in

2011 9 19846 32,608

(Source of data:

1) GDP(PPP) http://www.gfmag.com/tools/global-database/economic-data/10502-the-poorest-countries-in-the-world.html#axzz22Cxu9l3i

Table 6.2

2) Casualties in Haiti and Japan

http://www.emdat.be/result-disaster-

profiles?disgroup=group&dis_type='Earthquake%20(seismic%20activity)','Mass%20movement

%20dry','Volcano'&period=2003$2012)

The above table depicts the differences between the two disasters in terms of magnitude

of the disaster on the Richter scale, the number of casualties and GDP (PPP). The GDP (PPP)

has been considered here to compare costs of living across countries, by adjusting for differences

in purchasing power to purchasing power parities (PPPs), which convert local currencies to a

common currency, such as the U.S. dollar.

Analysis of the disaster preparedness in both the countries:

(Ref:

http://www.insead.edu/facultyresearch/centres/isic/humanitarian/EarthquakeTsunamiJapanDiffer

ences.cfm)

a) Disaster Preparedness

In Japan disaster management plans are designed and implemented based on the Disaster

Countermeasures Basic Act. The country has one of the most advanced earthquake early-

warning system. Most buildings in the country have earthquake resistant structures. The Central

Disaster Management Council is set to mitigate risks and prepare for disaster response. Japan

also embedded public education models to prepare its citizens for earthquakes. Disaster

education is part of various school curriculums. Social education at the community level includes

town–watching and hazard–mapping programs. Because of preparedness no major casualties

occurred as a result of the earthquake. In addition, Japan has early warning systems for tsunamis,

tidal waves, inundation and floods. Thus Japan was better prepared. In the case of Japan, the 9.0

magnitude earthquake was not the major cause of the disaster, but rather the tsunami. The 2010

Haiti earthquake on the other hand was of the 7.0 magnitude but claimed over 220,000 human

lives. In Haiti, despite that there were some warnings and forecasts issued regarding the potential

seismic activities in the area to geologists and policy makers at the 2008 Caribbean conference

no clear actions were taken to mitigate the risks. The particularly high death toll was also

Table 6.3

attributed to the poor quality of the buildings in the area. While the magnitude of this earthquake

was quite high, more stringent building codes, effective natural disaster planning and more

money spent on infrastructure development may have lessened the impact of this earthquake.

b) Governance

The Japanese Government was well-organised in responding to the crisis and performed far

better than the governments of some other recent disaster affected countries. The government of

Japan was good at mobilising Self Defense Forces (SDF) and using its military planes and ships

to help the affected areas. It also showed competency at facilitating international assistance. The

needs for international assistance were identified and decisions to allocate support were made

rather quickly. On the other hand, less developed country like Haiti has one of the world’s lowest

governance indices. The Haiti Government was weak and faced challenges in providing the

security to the people of Haiti long before the earthquake. The low level of governance presents

numerous challenges in a disaster context. First of all, it makes extremely difficult to prepare for

disasters. Second, political, economic and social conditions affect the speed and capacity to

respond immediately. For example, in Haiti, years of conflict, instability and recurrent disasters

such as cyclones, floods and mudslides had weakened Haiti’s already low capacity to invest in

the long-term safety of its citizens. This suggests that development and local capacity building

could help improve preparedness to natural disasters.

c) Resiliency level of citizens

i. Local Reactions:

The news media showed that contrary to Haiti where rioting and public outbursts of grief took

place after the earthquake, Japanese responded much quieter and with more patience, waiting for

help. Japanese people were also more organised.

ii. Level of Education and training:

People in Japan knew the procedures and safest places to go to when the earthquake struck.

Education and training helped to build disaster resilience and the ability to respond adequately. In

contrast, people in Haiti were unprepared about how to deal in the case of the major earthquake.

Thus it is observed that resilience can emerge from Local capacity building through education

and training.

iii Level of Disaster Management Culture:

Among many factors local culture may influence citizen reactions. Media widely discussed that

Japanese culture had a great influence on reassurance of order. The Government was able to

focus its efforts on search and rescue operations rather than redirecting resources to deal with

disorder. In contrast, stress and uncertainty in Haiti encouraged lootings, anger and grievance. In

Haiti the camps that were supposed to provide security and shelter actually presented threats to

women and children. Therefore, scarce resources have to be used to deal with the civil unrest.

iv. Socio-economic conditions:

These conditions also affect the country’s ability to face disasters both at government and

individual level. The high level of GDP (PPP) helped Japan to be better prepared for the disasters

and to establish risk reduction systems whereas the poor nation like Haiti was unable to be

prepared for the disaster. This highlights the fact that it is necessary to invest in to development

as it plays an important role in vulnerability reduction.

Thus it is observed that disaster preparedness and mitigation, governance and

socioeconomic conditions and cultural environment together shape disaster response.

6.6 Comparison of Measures Related to Pre-Disaster Phases and Post-Disaster Phases

Ex-ante measures are those measures which are related to the pre-disaster phases such as

preparedness and prevention and Ex-post measures are related to post disaster phases such as

rehabilitation and reconstruction. Ex-ante measures to improve disaster risk preparedness are

considered to be more cost-effective than ex-post measures. However, it is observed that

resources are generally allocated after a disastrous event even in the areas which are vulnerable

to disasters rather than deploying them before the disasters thus resulting in an inadequate

allocation. If more resources are allocated as a part of Ex-ante measures, to the pre-disaster

phases such as preparedness and prevention, the following advantages will accrue:

1) The overall resiliency level of the citizens will go up as a result of training initiatives and

awareness campaigns. This will result in effective response to an emergency situation.

2) The immediate (emergency) response time will be much shorter resulting in lesser loss of

lives, property and infrastructure.

3) There will be a reduced burden of reconstruction and rehabilitation due to the increased

efficiency.

4) Basic services can be restored very fast.

5) Efforts can be focused on developmental activities

6) The rise in the level of resiliency amongst citizens will go a long way in reducing the ill

effects of current as well as future disasters.

7) Expenditure and investments for disaster management can be planned in a more meaningful

and methodical manner rather than giving sudden shocks to the economy.

With proper planning and preparedness, the function of rehabilitation can be reduced to

a minimum. If there are long drawn plans of expenditure and if there are no clear cut deadlines

for the completion of rehabilitation work, it becomes burdensome to go on providing budgetary

support to the rehabilitation activities. Various options for augmenting financial resources should

be considered in light of the extent of perceived outlay and investment. For this, all the possible

avenues are required to be explored and a cost benefit analysis is required to be done. Natural

disasters entail huge government expenditure for reconstruction causing budgetary deficits. The

government becomes cash trapped and is hence forced to restrict spending. This not only affects

the rehabilitation and reconstruction initiatives but also affects the budget allocation to various

sectors of the economy. This can contribute to deflation and recession of the economy already

staggering due to repercussions of the disaster like unemployment, decrease in production and

poor trade. This has been evident by many countries such as Maldives, which was struck by a

Tsunami in 2004 December.

An opinion was taken from the sample of 50 respondents to know their opinion as to

Which out of the actions mentioned below will keep the disaster related costs at the

minimum?

a) Preparedness and prevention before disaster occurrence

b) Rehabilitation after disaster occurrence

The analysis revealed that 88% of the respondents feel that preparedness and prevention before

disasters will keep the disaster related cost at the minimum and 12% of the respondents feel that

rehabilitation after disasters will keep the disaster related cost at the minimum. Following

diagram shows the responses.

Opinion of the respondents on which of the action will keep the disaster related cost at the

minimum

(Pie chart drawn by the researcher on the basis of data collected from the respondents)

In this case Large Sample ‘test for specified value of Proportion’ was applied as follows:

Let P denote the proportion of respondents in favour of opinion that ‘Preparedness and

prevention before the disaster occurrence will keep the disaster related costs at the minimum ’.

Then if P is greater than or equal to 0.70, we say that the statement “Preparedness and prevention

before the disaster occurrence will keep the disaster related costs at the minimum as compared to

the rehabilitation after disaster” is true.

Sample size n = 50.

Observed sample proportion = 88%

To arrive at the conclusion we test the hypothesis, H0: P = 0.7 Vs H1: P> =0.70

One Sample Proportion Test was used. Since sample size is 50, large sample test i.e. Z-test was

applied.

preparedness and prevention before disaster occurrence

Rehabilitation after disaster occurrence

Figure 6.1

We have in symbols as follows:

H0: P=0.70(P0) means Preparedness and prevention before the disaster occurrence will

not keep the disaster related costs at the minimum as compared to the rehabilitation after disaster.

H1: P>=0.70 i.e. Preparedness and prevention before the disaster occurrence will keep the

disaster related costs at the minimum as compared to the rehabilitation after disaster.

One Sided Test was used.

The level of significance used was 5% and 1% if required.

The Z Statistic = {(P-P0)/ (√P0*Q0/n)}

Calculated value of Z = (0.88-0.70)/ SQRT (0.70*0.30/50)=2.777

The critical (Table) value at 5% level of significance: 1.64 and at 1% level of significance: 2.33

Decision: Since Calculated Z > Table value of Z at 5% and 1% level of significance,

Null Hypothesis H0 was rejected.

Means H1 was accepted.

Accept H1:

Preparedness and prevention before the disaster occurrence will keep the disaster related

costs at the minimum as compared to the rehabilitation after disaster.

Conclusion:

On the basis of the above analysis, case studies and other secondary data, it can be

concluded that preparedness and prevention before the disaster occurrence will keep the

disaster related costs at the minimum as compared to the rehabilitation after disaster.

It is required to see whether the proposed investments are widely divergent from other

plans made during the regular planning process. If planned budgetary investments are not

capable to handle the factors which may arise during a disaster the possibility of marginal

improvements/alterations to take care of the anticipated disaster situation should be considered.

It is important to see what level or intensity of disasters would be taken care of by the proposed

investments. It is needed to ensure that the methods of damage estimation are adequate and are

backed by adequate data. The possibility of errors in valuation and their impact on the financials

of the total plan are required to be considered. The planning of damage control activities at the

preparedness phase need to be linked with the mitigation and post disaster rehabilitation.

Appropriate changes are required to be done to reduce possibilities of wide variation between

actual and planned outlay. The demands of social and political factors should also be anticipated.

For decades, the financing of disasters has relied on a reactive approach consisting of the

diversion of funds from the domestic budgets. Such “ex post” funding approaches are inefficient,

often poorly targeted and insufficient. Moreover, they provide no incentive for proactive risk

reduction measures such as improved urban planning, higher construction standards, etc.

Reactive approaches to risk financing are becoming increasingly unsustainable as vulnerability is

increasing and emerging economies grow and accumulate more assets. The funding gaps

between available donor resources and post-disaster funding will grow if disaster prone countries

do not engage in risk reduction and pre-disaster risk financing. Insurance markets in the majority

of developing countries are underdeveloped. Where hazard coverage exists, it is usually limited

to major industrial and commercial properties and only to those households who can afford it.

Hence there is a need for a holistic approach encompassing the functions of Government,

corporate sectors and NGOs.

6.7 Role of Government of India and Provision of Funds

Traditionally, India had been ‘reactive’ in its approach towards disasters – with precious

resources being spent on relief, rehabilitation and reconstruction efforts. Today the focus has

shifted to a balanced approach including pre-disaster aspects such as disaster prevention,

mitigation and preparedness since it is felt that appropriate mitigation measures can substantially,

if not wholly, reduce the heavy toll of lives and property, the dissipation of developmental,

industrial and infrastructural gains and the hard-earned socio-economic infrastructure.

The Yokohama Strategy emphasized that in order to be effective, disaster prevention;

mitigation and preparedness need to be given preference than disaster response in achieving the

goals and objectives of vulnerability reduction. Prevention and mitigation contribute to lasting

improvement in safety and are essential to integrated disaster management. Disaster response

alone is not sufficient as it yields only temporary results at a very high cost. Also it is a reactive

strategy and therefore cannot be called as a holistic and balanced approach.

The High Powered Committee of Govt. of India, defined Disaster Management as "a

collective term encompassing all aspects of planning for and responding to disasters, including

both pre and post disaster activities. It may refer to the management of both the risks and

consequences of disasters". The term management has emerged as an umbrella term that

encompasses the entire disaster cycle, including mitigation. This needs careful noting and wide

spread awareness because traditionally the term management was restrictively used to address

only post disaster phenomena.

The Government of India has adopted mitigation and prevention as essential components

of their developmental strategy. The tenth five year plan emphasizes the fact that development

cannot be sustainable without mitigation being built into developmental process. In India each

state is supposed to prepare a plan scheme for disaster mitigation. Mitigation is being

institutionalized into developmental planning.

The approach of National Disaster Management Authority (NDMA) affirms that till

recently, the approach to Disaster Management has been reactive and relief centric. A paradigm

shift has now taken place at the national level from the relief centric syndrome to holistic and

integrated approach with emphasis on prevention, mitigation and preparedness. These efforts are

aimed to conserve developmental gains as also minimize losses to lives, livelihood and

property. A typical Disaster Management continuum reflects this approach as shown below. It

contains six elements i.e., Prevention, Mitigation and Preparedness in pre-disaster phase, and

Response, Rehabilitation and Reconstruction in post-disaster phase while defining the complete

approach to Disaster Management.

(Source: National Disaster Management Authority, Government of India Approach to Disaster

Management http://ndma.gov.in/ndma/approachdm.html)

Along with the mass devastation of the lives and properties of the common citizens of the

country, the disasters have adverse impacts on property and overall sustainability of business

Figure 6.2

Figure 6.3

organizations. In view of the natural disasters which have devastated the businesses and the

corporate infrastructure, the entrepreneurs need training and other support. The sooner the

businesses start recovering and resuming their activities, the quicker the livelihoods of people

dependent on them can be restored. Large businesses affected by the disaster impact may need

short/medium term loan or other financial support through policy initiatives to overcome the

financial crisis. They also require fast restoration of infrastructure such as roads, bridges, rail or

other modes of transport, and means of communication. For this the Government is required to

invest more funds in the equipments and technology for prediction of disasters and for

minimizing their ill effects.

The provision of funds:

The problem of funding relief expenditure has been recognized by every finance

commission since the second. Successive finance commissions since then have made

recommendations with regard to provision for relief expenditure out of the revenues of the states

and the extent of support to be extended by the centre to the states. The earlier arrangement made

in this regard, at the behest of the Second Finance Commission, was commonly called the

‘margin money scheme’. This arrangement, which involved setting apart a specified sum by the

states as margin for relief expenditure, with centre meeting excess requirement, continued to be

endorsed by the later finance commissions up to the eighth, with some minor changes.

The scheme of Calamity Relief Fund (CRF) was essentially based on the

recommendations of the Ninth Finance Commission. While determining the size of the CRF the

Ninth Finance Commission did not restrict itself to the margin money, as was done by the earlier

(fourth to the eighth) finance commissions but took into consideration the average of ceilings of

expenditure, which included margin money, advance plan assistance (grant and loan), special

central assistance and the state’s own share of 25 per cent over the ten year period ending in

1988-89. On this basis, the total amount of CRF for all states was worked out to Rs.804 crore per

year. While determining the size of the CRF, the Tenth Finance Commission considered the

average of the aggregate of ceilings of expenditure for the years 1983- 84 to 1989-90 and the

amount of CRF for the years 1990-91 to 1992-93 The amount so worked out for all the states

was adjusted for inflation up to 1994-95 and thereafter, at graduated rates with the same

elasticity as for other non-plan revenue expenditure, up to 1999-2000. The total amount of CRF

for all states for the period 1995-2000 was thus worked out to Rs.6304.27 crore. The Calamity

Relief Fund (CRF) and the National Calamity Contingency Fund (NCCF) were available for

immediate disaster relief. The financial scheme which was in operation from 2005-06 to 2009-10

is based on the recommendations of the Twelfth Finance Commission (TFC). The TFC

recommended continuation of the schemes of Calamity Relief Fund (CRF) and National

Calamity Contingency Fund (NCCF). It also recommended that avalanches, cyclone, cloudburst,

drought, earthquake, fire, flood, hailstorm, landslide and pest attacks are to be considered as

natural calamities for providing assistance from CRF/NCCF. CRF was constituted for each state

with an allocated amount. Contributions by the government and state government were in the

ratio 3:1. Additional help is provided from the NCCF if the calamity is severe in nature. The

procedure to release funds necessary to a state for receiving national funding consisted, until

1990, in providing a Memorandum by the State Government applying for Central aid and a visit

by the Central Team to the affected State. From 1990 onwards, each state was to create a CRF.

The decentralization of this fund enabled each state to assess the funds necessary to ensure

appropriate disaster response and relief. The funds, available as part of the CRF State funds,

were to be spent to compensate losses such as loss of life, crop, livestock, emergency daily

allowance, employment as per benefits defined by the Government. These funds were not

available for infrastructure repairs. Only emergency necessary relief should be covered under

these funds.

Calamity Relief Fund (Selected States) (Rs. In Lakhs)

State 2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

Andhra Pradesh

14854 15597 16377 17196 18056 34408 36128 37935 39831 41823

Bihar 9274 9738 10225 10736 11273 14893 15323 15774 16248 16745

Gujarat 12105 12710 13346 14013 14714 24600 25830 27122 28477 29900

Maharashtra

11790 12380 12999 13649 14331 22290 23405 24575 25804 27095

Orissa 8210 8621 9052 9504 9979 30154 31024 31938 32897 33903

Rajasthan 15525 16301 17116 17972 18871 41564 43642 45825 48116 50520

Tamil Nadu

7698 8083 8487 8911 9357 20908 21953 23051 24203 25413

Assam 10149 10657 11189 11749 12336 19306 19862 20448 21063 21707

Uttar Pradesh

17864 18757 19695 20680 21714 29594 30448 31345 32287 33274

West 10110 10616 11147 11704 12289 23473 24150 24862 25609 26391

Bengal

(Source: Annual reports of Ministry of Home Affairs)

Notes:

1) The allocations shown above for 2005-06 are up to 21st February 2006.

2) The allocations shown above for 2006-07 are up to 31st December 2006.

3) The allocations shown above for 2009-10 are up to 19thNovember 2009.

Calamity Relief Fund allocation (selected states)-graphical presentation (Rs. In lakhs)

(Graph drawn by the researcher on the basis of data of Ministry of Home Affairs)

0

10000

20000

30000

40000

50000

60000

Andhra Pradesh

Bihar

Gujarat

Maharashtra

Orissa

Rajasthan

Tamil Nadu

Assam

Uttar Pradesh

West Bengal

Table 6.4

Figure 6.4

The above diagram shows an increasing trend of Calamity Relief Fund Allocation for the

selected states.

The Schemes of CRF/NCCF provided for only immediate relief to the victims of natural

calamities. The expenditure on restoration of infrastructure and other capital assets were required

to be met from the Plan funds of the States.

The Thirteenth Finance Commission recommended that

(i) In conformity with the provision of D.M. Act 2005, the Calamity Relief Fund (CRF) to be

merged into the State Disaster Response Funds (SDRFs) of the respective States and the National

Calamity Contingency Fund (NCCF) into the National Disaster Response Fund (NDRF).

(ii) Contribution to the SDRFs to be shared between the Centre and States in the ratio of 75:25

for General Category States and 90:10 for Special Category States.

(iii) Balances as on 31.03.2010 under NCCF and the State CRFs to be transferred to the NDRF

and respective SDRFs.

(iv) Budgetary provisions for the NDRF to be linked to expenditure of the previous year from the

fund. With cess being subsumed on introduction of the GST, alternative sources of financing are

required to be identified.

(v) Total size of the SDRF has been worked out as Rs 33,580.93 crore to be shared in ratio given

under item (ii) above.

The amounts deposited by the Central Government and the States in the CRF are invested

in securities, deposits and other safe financial products as prescribed by Ministry of Finance. The

investments are made by the local branch of the RBI or some other bank prescribed by the RBI.

Funds transferred and maintained at state level are available to the state within reasonable time

when a disaster occurs. Beside the State Funds, a national fund, National Fund for Calamity

Relief (NFCR), was in place. Its objective was to cover calamities of rare severity. But the

definition of “rare severity” was not clear, leading to states using it inappropriately. It was

therefore discontinued in 2005 upon recommendation of the 11th Finance Commission. The

calamity support funds may be considered as project funds and expenditures from these funds are

regulated. It is the duty of the concerned government officials to monitor the extent and purpose

of usage of these funds.

If the CRF is not sufficient to cover the losses, which is the case when severe disasters

strike, the state government requests additional support from the central government. Whenever

the state government requests additional financial support, the centre has to do a loss assessment

on the basis of which, it decides the amount to be disbursed to the state government. If the

central government is not able to supply funds, then it seeks help from bilateral and multilateral

agencies. It requires acceptance of loan conditions which might not be in line with national or

state capacity and ambitions. So, there is always a time gap between request for relief and actual

financial support made available. There is considerable uncertainty in forecasting the actual

losses and availability of funds. It is impossible to keep sufficient reserves to tackle disasters.

Also, there is no standardized way for accurate loss assessment common to both the states and

the centre. Besides, the states cannot use excess relief funds from the Calamity Relief Fund for

risk mitigation activities as there is uncertainty in the amounts needed for the next financial year

for post disaster relief. There are no specific steps towards the growth of domestic catastrophe

insurance market. An efficient domestic insurance market backed by international reinsurers,

government and other entities can take a significant part of the burden off the government’s

shoulders.

National Calamity Contingency Fund (NCCF)

If the CRF is insufficient for a state confronted with a disaster, the state may request the

use of a National Calamity Contingency Fund, provided by the Central Government. This fund is

available in case of natural catastrophes like cyclones, drought, earthquakes, fire, flood,

hailstorm, tsunami, landslide, avalanche and pest attacks. The State hit by a natural catastrophe

has to request funds for the damage it incurred and funds necessary to cope with the outcome of

the disaster. It has to submit a request to national-level commission (the ICT). The balance of the

NCCF is transferred to following year if the balance is positive at year-end and all allocated

funds were not utilized.

Release of NCCF (selected states) (Rs. In lakhs)

State 2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007 -08

2008-09

2009-10

Andhra Pradesh

0 30.4 59.9 116.8 117.9 100 203 37.5 29.82 500

Bihar 29.7 0 0 0 398.9 0 0 0 1000 0

Gujarat 585 994.4 23.3 32.4 55 304 546 0 0 0

Maharashtra 0 0 20 77.5 173.2 657 590 168.9 0 182.1

Orissa 35 114.6 21.8 104.4 53.4 0 25 0 176.6 0

Rajasthan 85 79 434.1 512.7 108 0 100 0.3 0 115.1

Tamil Nadu 0 0 216 289.5 734.5 1132 0 0 522.5 0

Assam 0 0 0 0 211.6 0 0 0 300 0

Uttar Pradesh

0 0 310.1 41.87 192.1 0 0 0 0 149

West Bengal

103.2 0 0 0 0 0 0 0 0 166.9

(Source: Ministry of Home affairs annual reports)

Table 6.5

Release of NCCF (selected states) –graphical presentation (Rs. In lakhs)

(Graph drawn by the researcher on the basis of data of Ministry of Home Affairs)

In the above graph Gujarat depicts a high usage of NCCF in 2001-02 due to the

devastating earthquake. Tamil Nadu shows a highest amount of NCCF usage in 2005-06 in view

of the Tsunami of 2004. The usage of NCCF was high in case of Maharashtra due to the 2005

floods and in case of Bihar due to the devastating flood of 2008.

Government expenditure on relief on account of natural calamities

The economic classification of the budget of the Government of India classifies the

expenditure into two categories, viz. Development Expenditure and Non-Development

Expenditure. All expenditure relating to revenue account, capital outlay and Loans and Advances

are categorised into social services, economic services and general services. Thus, the

development expenditure includes the development components of revenue expenditure, capital

outlay and loans and advances by the State governments. The social sector expenditure includes

expenditure on social services, rural development, and food storage and warehousing under

revenue expenditure, capital outlay and loans and advances by the State governments. Capital

outlay includes both development and non-development capital outlay.

Development Expenditure is broadly defined to include all items of expenditure that are

designed directly to promote economic development and social welfare. While social and

economic services constitute development expenditure, expenditure on general services is treated

0

200

400

600

800

1000

1200Andhra Pradesh

Bihar

Gujarat

Maharashtra

Orissa

Rajasthan

Tamil Nadu

Assam

Uttar Pradesh

Figure 6.5

as non-development expenditure. Non-development expenditure includes expenditure pertaining

to the general services rendered by the Government such as preservation of law and order,

defence of the country and the maintenance of the general organs of the Government.

Development expenditure is meant to contribute to some aspect of development and is

generally considered good. Non development expenditure includes items related to cost of

running the government. An increase in non government expenditure is generally considered

bad.

Non-developmental and developmental expenditure incurred by the Government of India

on account of relief in respect of natural calamities (2001-2010)

Year

Non-developmental

expenditure -Relief on

account of natural calamities

Developmental expenditure -

Relief on account of natural

calamities

2000-01 3698.63 18.61

2002-03 3820.4 134.21

2003-04 4201.21 171.82

2004-05 4983.44 117.64

2005-06 7809.57 170.67

2006-07 7006.26 79.28

2007-08 5937.56 14.48

2008-09 7274.74 62.34

2009-10 9805.05 107.44

2010-11 4280.68 167.23

(Source: Indian Public Finance Statistics (2010-2011)

http://finmin.nic.in/reports/IPFStat201011.pdf)

Table 6.6

Non-developmental and developmental expenditure incurred by the Government of India

on account of relief in respect of natural calamities (2001-2010)-graphical presentation:

(Graph drawn by the researcher on the basis of data of INDIAN PUBLIC FINANCE

STATISTICS (2010-2011, http://finmin.nic.in/reports/IPFStat201011.pdf)

It is evident from the above graph that the development expenditure on disaster

management activities has remained much lower than the non- development expenditure in the

decade 2001-2010. The Government needs to aim at reduction of non development expenditure

and strategies for prudent development expenditure in order to achieve sustainable and consistent

development in the long run.

PMNRF

It is a relief fund under the authority of the prime minister. The fund does not get any

budgetary support and consists entirely of public contributions. All donations are exempt from

taxes. The fund is generally invested in fixed deposits. The PMNRF is utilized to render

immediate relief to families of those killed in natural calamities like floods, cyclones and

earthquakes, etc. and also to the victims of the major accidents and riots.

ACA – Additional Central Assistance

0

2000

4000

6000

8000

10000

12000

Non-developmental


account of natural

calamities

Developmental


account of natural

calamities

Figure 6.6

Another financing mechanism from the GOI to support states where disaster occurs exist,

is the Additional Central Assistance. The ACA is a combination of a Grant and a Loan to the

affected state. States falling into the general category receive 30% grant – 70 % loan whereas the

special category states get 90% of the amount as a grant and only 10% as a loan they will have to

reimburse to the Central Government. The funds are released weekly according to the

recommendations of the Aids Account & Audits division of the Ministry of Finance. The 12th

Finance Commission has recommended that External Assistance may be passed on to states on

the same terms and conditions, on which the loans/grants are received by GOI which has been

accepted by the Government of India

A survey of 50 citizens was conducted and they were asked questions to find out their opinion

about various measures to be undertaken to reduce the costs and to improve the efficiency in

disaster management:

6.8 Opinion of Respondents on Whether the Government Should Invest More Funds in

Tools / Equipments / Technology for Prediction of Disasters (e.g. Earthquake Predicting

Instruments) as well as to Minimize the Impact of Disasters

A survey of 50 respondents was conducted and they were asked the following question

Do you think that the governments should invest more funds in tools / equipments /

technology for prediction of disasters (e.g. earthquake predicting instruments) as well as

to minimize the impact of disasters? (Y/N)

The analysis revealed that 98% of the respondents feel that the government should invest more

funds in tools / equipments / technology for prediction of disasters (e.g. earthquake predicting

instruments) as well as to minimize the impact of disasters and 2 % of the respondents feel that

there is no such need.

Opinion of respondents


To arrive at the conclusion we Test the hypothesis,

H0: The government should not invest more funds in tools / equipments / technology for

prediction of disasters (e.g. earthquake predicting instruments) as well as to minimize the impact

of disasters,

Against the alternative

H1: The government should invest more funds in tools / equipments / technology for prediction

of disasters (e.g. earthquake predicting instruments) as well as to minimize the impact of

disasters.


applied.

Let P denote proportion of people who feel that the government should not invest more funds in

tools / equipments / technology for prediction of disasters (e.g. earthquake predicting

instruments) as well as to minimize the impact of disasters.

Yes

No

Should Govt.invest more funds in tools/ equipments/ technology for prediction

or minimisation of disasters?

Figure 6.7

The Null hypothesis to be tested was

We have in symbols as follows.

H0: P= 0.70 (P0) means ‘the government should not invest more funds in tools / equipments /

technology for prediction of disasters (e.g. earthquake predicting instruments) as well as to

minimize the impact of disasters’.

H1: P >= 0.70 i.e. ‘the government should invest more funds in tools / equipments / technology

for prediction of disasters (e.g. earthquake predicting instruments) as well as to minimize the

impact of disasters’.



The Z Statistic = (P-P0)/ (√P0*Q0/n)

(0.98-0.70)/ (√0.70*0.30/50)=4.320

The value at 5% level of significance is 1.64


Arrived value is higher than the value at 5% level of significance as well as at 1% level of

significance. Hence at both levels, H0 is rejected. And H1 is accepted.

Decision:Accept H1

The government should invest more funds in tools / equipments / technology for

prediction of disasters (e.g. earthquake predicting instruments) as well as to minimize the

impact of disasters’.

Conclusion:

On the basis of the above analysis and the available secondary data, it can be concluded

that the government should invest more funds in tools / equipments / technology for

prediction of disasters (e.g. earthquake predicting instruments) as well as to minimize the

impact of disasters.

It is also needed to have an effective information system to assess economic losses

caused due to disaster. It is important to compile factual and detailed data at the

preparedness/prevention phase. There is a need to establish a system of updating them on a

periodical basis. This system will go a long way in reducing the major problems that occur in the

mitigation and reconstruction/ rehabilitation phases due to inappropriate assessment of the

disaster situation. This will also help while planning a coping strategy.

6.9 Opinion of Respondents on Whether There Should be an Effective Information System

to Assess Economic Loss Caused Due to Disaster in Any Area


Do you think that there should be an effective Information System to assess economic loss

caused due to disaster in any area? (Y/N)

The analysis revealed that 98% of the respondents feel that there should be an effective

Information System to assess economic loss caused due to disaster in any area and 2 % of the

respondents feel that there is no such need.

Opinion of Respondents


To arrive at the conclusion, we test the Null hypothesis,

H0: There is no need to have an effective Information System to assess economic loss caused

due to disaster in any area

Against the alternative

H1: There should be an effective Information System to assess economic loss caused due to

disaster in any area.


applied.

Let P denote proportion of people who feel that there is no need to have an effective Information

System to assess economic loss caused due to disaster in any area.

We have in symbols as follows.

Yes

No

Whether there should be an effective information system to assess economic

Figure 6.8

H0: P= 0.70 (P0) means there is no need to have an effective Information System to assess

economic loss caused due to disaster in any area against the alternative hypothesis.

H1: P >= 0.70 i.e. There should be an effective Information System to assess economic loss

caused due to disaster in any area.



The Z Statistic = (P-P0)/ (√P0*Q0/n)

(0.98-0.70)/ SQRT (0.70*0.30/50)=4.320



Arrived value is higher than the value at 5% level of significance as well as at 1% level of

significance. Hence at both levels, H0 is rejected.

Decision: Accept H1

There should be an effective Information System to assess economic loss caused due to


Conclusion:

On the basis of the above analysis and the available secondary data, it can be concluded

that there should be an effective Information System to assess economic loss caused due to


6.10 Review of Various Initiatives to Establish Connectivity:

It is observed that most of the times the disaster management program is not typically

equipped to create an integrated database. Following structure of Information and

communication has been envisaged in the ‘National Disaster Management Guidelines for

Information and Communication System, February 2012’:

The guidelines envisage establishing a reliable, dedicated and technology-based, National

Disaster Communication Network (NDCN) for transporting the value added information to the

stakeholders, with particular emphasis on the last mile connectivity to the affected community

during all phases of disaster continuum. The proposed NDCN would be a “network of networks”

created by leveraging all existing terrestrial and satellite communication networks including

NICNET, SWANs, POLNET, DMNET (ISRO) etc that would be connected to various

Emergency Operation Centers (EOCs) at National (NEOC), State (SEOCs) and Districts

(DEOCs) Levels through appropriate routers and gateways.

Response to disaster events is time critical. Logistical support option for providing relief

materials, damage surveys, baseline maps, equipment, human resources, and funds all need to be

accessible. Communications among response teams and to the general public become most vital.

Rapid, reliable, configurable, controlled access communication is vital to efficient disaster

response operations. Major challenges are presented by extreme conditions of infrastructure

destruction, communication traffic peaks, mobile users, and sensitive data. National Informatics

Centre is the nodal Information Technology organization for informatics development and

networking in Government and related organizations. NIC undertook informatics research and

development under its national programme called “Natural Hazards Management Information

System in 1990 to support United National Natural Disaster Reduction Decade Programme.

Presently NICNET connects all the Central & 35 State/ UTs Government Ministries/

Departments in the country. NICNET has about 2500 VSATs operating in districts, blocks of

Jammu & Kashmir, Chhattisgarh, Orissa and few North Eastern States. Another 2500 locations

in North Eastern States where terrestrial / broadband services are likely to be available, are

expected to get satellite connectivity under Common Service Centers (CSC) project funded by

DIT in which NICSI/NIC is to provide the HUB and the required satellite bandwidth. State Wide

Area Network (SWAN) is the approved scheme of GOI for interconnecting state headquarters

with District headquarters and District headquarters with Block headquarters. The Department of

Information Technology (DIT) of Government of India has earmarked a significant outlay of

Rs.3334 crores with Rs.2005 crores as grant-in-aid from DIT for supporting this activity.

Connectivity under the activity of Department of Information Technology

Figure 6.9

Figure 6.10

Another initiative has been taken by the Centre for Distributed Computing Jadavpur

University in collaboration with IIM, Calcutta. It has initiated a project titled “A Secured

Decentralized Disaster Management Information Network using rapidly deployable wireless

network & mobile computing technologies”. This project is funded by Department of IT, Min. of

Communications and IT, Govt. of India.

The SAARC Disaster Management Centre has developed the concept of India Disaster

Knowledge Network (IDKN), a web GIS based portal within South Asian Disaster Knowledge

Network (SADKN) that provides a wide spectrum of resources, knowledge and services. India

Disaster Knowledge Network (IDKN) is a Web Portal, that offers a broad array of resources and

services, such as knowledge collaboration, Networking, Maps, Emergency contact information

system and other valuable information related to Natural disasters. IDKN is an essential tool to

share information for Managing disasters. Main Goal of IDKN is to create an easy to use unified

point of access to Disaster Management Knowledge and Services and hence an accelerated and

Improved quality of Disaster Mitigation and Response.

6.11 Opinion of Respondents on Which of the Financial Reforms will be Most Useful in

Case of Natural Disasters in India


Which of the following reforms will be most useful in case of natural disasters in India?

Ran

k

Compens

ation to

victims

Subsidi

es and

grants

to

disaster

-prone

area

More

budget

allocation

for

improvem

ent in

security

measures

&

provisions

More

budget

allocation

for

creation

of

awarenes

s &

alertness

Issue

of

catastr

ophe

bonds

Employme

nt

opportunit

ies to

victims &

their

family

members

Any

other

Su

m

1st 7 8 15 13 2 5 0 50

2nd 8 6 13 11 3 9 0 50

3rd 12 11 4 8 4 10 1 50

4th 9 11 8 9 6 6 1 50

5th 6 12 8 5 10 9 0 50

6th 8 2 2 3 24 11 0 50

7th 0 0 0 1 1 0 48 50

50 50 50 50 50 50 50

The researcher supposes some reforms and wanted to know opinion of respondents as most

useful response in case of natural disasters in India. Accordingly respondents ranked the reforms

in order of their preference. The data of 1st rank is compiled and following frequency

distribution is obtained.

Table 6.7

Rank 1 Frequency Distribution

Reform No. of

Respondents

Percentage

Frequency

Compensation to victims 7 14

Subsidies and grants to disaster

prone area

8 16

More budget allocation for

improvement in security measures

& provisions

15 30


creation of awareness and alertness

13 26

Issue of catastrophe bonds 2 4

Employment opportunities to

victims and their family members

5 10

Total 50 100

The mode of the distribution is “More budget allocation for improvement in security

measures & provisions”.

Analysis of opinion of respondents

14% of the respondents are of the opinion that ‘Compensation to victims’ is most useful

reform. 16% are of the opinion that ‘Subsidies and grants to disaster prone area’ is a most useful

reform. 30% are of the opinion that ‘more budget allocation for improvement in security

measures & provisions’ is a most useful reform. 26% are of the opinion that ‘more budget

allocation for creation of awareness and alertness’ is a most useful reform. Only 4% are of the

opinion that ‘Issue of catastrophe bonds’ is a most useful reform and 10% are of the opinion that

‘Employment opportunities to victims and their family members’ is a most useful reform.

Table 6.8

Conclusion

Since the mode of the distribution is “More budget allocation for improvement in security

measures & provisions”, this will be the most useful reform in case of natural disasters in

India.

6.12 Opinion of respondents on which of the financial reforms will be most useful in case of

man-made disasters in India


Which of the following reforms will be most useful in case of man-made disasters in India?

Ran

k

Comp

ensati

on to

victim

s (no.

of

people

ranke

d)

Subsidie

s and

grants to

disaster-

prone

area (no.

of

people

ranked)

More

budget

allocatio

n for

improve

ment in

security

measure

s and

provisio

ns (no.

of

people

ranked)

More

budget

allocatio

n for

creation

of

awarene

ss and

alertness

(no. of

people

ranked)

Issue

of

catastr

ophe

bonds

(no. of

people

ranke

d)

Creation

of

reserves

for

disaster

managem

ent by

Governm

ent and

organisati

ons (no. of

people

ranked)

Any

other

(no.

of

peopl

e

ranke

d)

S

u

m

1st 12 3 20 9 0 5 1 50

2nd 8 6 10 15 0 11 0 50

3rd 4 10 11 8 5 12 0 50

4th 13 8 5 12 4 7 1 50

5th 7 15 4 4 7 13 0 50

6th 6 7 0 1 34 2 0 50

7th 0 1 0 1 0 0 48 50

50 50 50 50 50 50 50

Table 6.9

The researcher supposes some reforms and wanted to know opinion of respondents as most

useful response in case of manmade disasters in India. Accordingly respondents ranked the

reforms in order of their preference. The data of 1st rank is compiled and following frequency

distribution is obtained.


Reform No. of

Respondents

Percentage

Frequency

Compensation to victims 12 24

Subsidies and grants to

disaster prone area

3 6


improvement in security

measures & provisions

20 40


creation of awareness and

alertness

9 18

Issue of catastrophe bonds 0 0

Employment opportunities

to victims and their family

members

5 10

Any other 1 2

Total 50 100

The mode of the distribution is “More budget allocation for improvement in security

measures & provisions”

Table 6.10


24% of the respondents are of the opinion that ’Compensation to victims’ is a most useful

reform. 6% are of the opinion that ‘Subsidies and grants to disaster prone area’ is a most useful

reform. 40% are of the opinion that ‘more budget allocation for improvement in security

measures & provisions’ is a most useful reform. 18% are of the opinion that ‘more budget

allocation for creation of awareness and alertness’ is a most useful reform. 0% is of the opinion

that Issue of catastrophe bonds is a most useful reform. 10% are of the opinion that ‘Employment

opportunities to victims and their family members’ is a most useful reform and 2% gave 1st rank

to ‘Any other’ reform.

Conclusion

Since the mode of the distribution is “More budget allocation for improvement in security

measures & provisions”, this will be the most useful financial measure in case of manmade

disasters in India.

6.13 Ranking by the respondents of the general reforms / measures for disaster

management in the order of significance:

Rank the following general reforms / measures for disaster management in the order of

significance: (Most significant will get rank 1 and so on.)

Ran

k

Public

awarene

ss (no. of

people

ranked)

Training

& mock

drills

(no. of

people

ranked)

Budget

allocatio

n (no. of

people

ranked)

Inclusio

n of

Disaster

Mgmt

studies

in

academi

c

curricul

um (no.

of

people

ranked)

Preventi

ve

measure

s (no. of

people

ranked)

Contributi

ng a

certain

part of

revenue for

the disaster

mgmt

activity by

corporate

sector (no.

of people

ranked)

Su

m

1st 24 1 3 10 10 2 50

2nd 12 11 9 7 7 4 50

3rd 5 12 6 15 9 3 50

4th 4 12 13 5 11 5 50

5th 3 9 12 10 9 7 50

6th 2 5 7 3 4 29 50

50 50 50 50 50 50

The researcher supposes some general reforms/measures for disaster management in the order of

significance: (Most significant will get rank 1 and so on.) and wanted to know which is most

significant measure or general reform. Accordingly respondents ranked the reforms in order of

their preference. The data of 1st rank means ‘most significant’ is compiled and following

frequency distribution is obtained.

Table 6.11


General reforms/

measures for disaster

management

No. of Respondents Percentage

Frequency

Public awareness 24 48

Training & mock drills 1 2

Budget allocation 3 6

Inclusion of Disaster

Mgmt. studies in

academic curriculum

10 20

Preventive measures 10 20

contributing a certain part

of revenue for the disaster

mgmt activity by

corporate sector

2 4

Total 50 100

The modal value is ‘Public awareness’.


48% of the respondents were of the opinion that ‘Public awareness’ will be most useful

reform. 2% were of the opinion that ‘Training & mock drills’ will be a useful reform. 6 % were

Table 6.12

of the opinion that ‘budget allocation’ will be a most useful reform. 20% were of the opinion that

‘Inclusion of Disaster Mgmt. studies in academic curriculum’ will be a most useful reform. 20 %

were of the opinion that ‘Preventive measures’ will be a most useful reform. 4 % were of the

opinion that ‘contributing a certain part of revenue for the disaster mgmt activity by corporate

sector’ will be a most useful reform.

Conclusion

Since Modal reform is ‘Public awareness’ it can be concluded that the most significant

general Reform is Public awareness.

It is already observed in the case studies that resiliency building of citizens as a measure of

preparedness is of utmost importance to keep the disaster related losses at the minimum.

chapter 6 financial implications of disasters and role of...

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