15th FC's disaster risk index to address deficiency in state-level funding

To address the political slugfest that follows each time the Centre allocates money for disaster relief, the 15th Finance Commission has attempted a transparent methodology for disaster management.

A Disaster Risk Index (DRI) has been prepared that assigns scores to each state based on probability and vulnerability.

“It is the first attempt to include state-level disaster risk scores in resource allocation and address a serious deficiency in the previous state-level allocations for disaster management,” the commission said in its report tabled in Parliament on Saturday.

The DRI has been developed through a quantitative exercise assigning scores to the probability of hazards and the extent of vulnerability of a state. 

For vulnerability, the commission has used both income and non-incom dimensions like poor housing, informal jobs, social isolation and remote terrains.

The revised methodology for making allocations to states retains the importance assigned to the expenditure incurred by states on disaster management. In addition, it introduces weightages for area, population and risk profile of individual states to arrive at the final allocation. 

Seventy per cent weightage has been assigned to expenditure. Area and population have been given weightage of 15 per cent each.

Hazard zonation and risk exposure maps have been used to arrive at probability. While hazard has been assigned a score of 70, vulnerability has been given 30. 

The four major hazards that have been assigned a score of 15 each are floods, drought, cyclone and earthquake. The remaining score of 10 has been assigned equally to all states for smaller hazards like landslides, windstorms, hailstorm, cloud burst and lightening.

States where floods affect more than 20 per cent of the total area are assigned a score of 15, while states where between 10 and 20 per cent of the total area is affected are assigned a score of 10. 

The remaining states with less than 10 per cent of the area affected have been assigned a score of 5.

Arunachal Pradesh and Tamil Nadu are exceptions to the flood scoring. Arunachal has been given a high score because the Brahmaputra floods it every year. In the case of Tamil Nadu, the score is 10 since it experienced heavy floods in the recent past.

States, which have a larger share of chronically drought prone areas, are assigned a higher score of 15. Those with a significant share of such areas have been assigned 10. States like Andhra Pradesh, Gujarat, Bihar, Odisha and Uttar Pradesh are in the high risk category for both floods and drought.

The higher score of 15 has been assigned to Andhra Pradesh, Odisha and West Bengal, which have very high cyclone-prone districts. Tamil Nadu, Kerala and Gujarat have been assigned 10.

For earthquake, all Northeastern and Himalayan states along with Bihar, Gujarat and Maharashtra have been given 15.

The vulnerability has been assigned based on the below poverty line population. States with poverty rate of 26 per cent and above have been assigned the highest score of 30. Those with poverty rates of 13-26 per cent got a score of 10 and below 13 per cent, the score assigned is five.

For calculating the allocation, disaster relief fund allocation of Maharashtra in 2019-20 has been used.

A per capita allocation based on population and per square kilometre of area has been derived. These values have been applied to the population and area of each state. 

The sum of 15 per cent of weightage and 70 per cent of expenditure of each state is multiplied by the DRI score. The figure arrived through this is again added to the total value arrived through expenditure, population and area to give the base value for each state.

From the base value, the allocation of 2020-21 has been calculated after considering the standard annual inflation of 5 per cent.

An additional allocation of 11 per cent has been provided for the 10 northeastern and Himalayan states. This is to pay greater attention to infrastructure resilience in these states in view of the continuous disruption of their transport network by flash floods, landslides and other mountain hazards. 

These states, however, do not have very high DRI score. Their scores range between 40 and 50.

The reason that Maharashtra has been taken as the base is because it got the highest allocation for SDRF for 2019-20. 

Besides, it is neither the biggest nor the most populous and is exposed to multiple hazards in different geographical settings. It also has the largest urban sprawl.