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DISASTER RISK REDUCTION:
ROLE OF FINANCIAL
INSTITUTIONS
Subrata Nath
Director
Dept. of Agriculture & Cooperation
Min. of Agriculture, Govt. of India
05-12-2014
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Disaster Losses in India:
about 0.3% of GDP
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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)
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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
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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)
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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
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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 !
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FINANCING DISASTER RISK REDUCTION (DRR)
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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
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BEYOND PUBLIC FINANCING : POTENTIAL AREAS
Insurance (except Crop
Insurance)
Micro Finance & Micro
Insurance
Multi-lateral financing
Private Investment
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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
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MICRO FINANCE AND MICRO INSURANCE
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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).
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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
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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
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THANKS [email protected]