Exploring Various Sources of Disaster Relief Funding in India

When disaster strikes, the immediate priority is ensuring that affected communities receive swift financial assistance for relief and recovery. India, with its diverse geographical terrain and high vulnerability to natural calamities, has developed a multi-layered funding architecture to respond effectively to emergencies. From government funds established under law to international humanitarian assistance and corporate contributions, understanding these funding streams helps stakeholders coordinate better and ensures aid reaches those who need it most.

Governmental funding mechanisms 🔗

The Indian government has established robust financial mechanisms to ensure immediate availability of resources during emergencies. These funds operate at both central and state levels, creating a structured approach to disaster financing that balances speed with accountability.

State Disaster Response Fund (SDRF) 🔗

The State Disaster Response Fund, constituted under Section 48 (1) (a) of the Disaster Management Act, 2005, serves as the primary fund available with state governments for responding to notified disasters. This fund represents the first line of financial defence when calamities occur.

The Central Government contributes 75% of the SDRF allocation for general category states and union territories, while special category states (northeastern states, Sikkim, Uttarakhand, Himachal Pradesh, and Jammu & Kashmir) receive 90% central contribution. The remaining portion comes from respective state governments.

SDRF covers response to cyclones, drought, earthquakes, fire, floods, tsunami, hailstorms, landslides, avalanches, cloudbursts, pest attacks, frost, and cold waves. Additionally, state governments may use up to 10% of SDRF funds for local disasters not included in the national list, provided they have established clear guidelines with state authority approval.

National Disaster Response Fund (NDRF) 🔗

The National Disaster Response Fund, established under Section 46 of the Disaster Management Act, 2005, supplements state resources when disasters of severe nature overwhelm a state’s coping capacity. The entire NDRF contribution comes from the Central Government.

When states face inadequate funds in their SDRF during major emergencies, they can request assistance from NDRF. The Ministry of Home Affairs then evaluates the situation, often dispatching an Inter-Ministerial Central Team (IMCT) to assess affected areas and recommend additional funding. A high-level committee chaired by the Home Minister ultimately decides on fund allocation.

The 15th Finance Commission has allocated Rs. 68,463 crore for the National Disaster Risk Management Fund (NDRMF) for 2021-26, with 80% (Rs. 54,770 crore) designated for disaster response and 20% (Rs. 13,693 crore) for mitigation activities.

Prime Minister’s National Relief Fund (PMNRF) 🔗

The Prime Minister’s National Relief Fund was established in January 1948 following an appeal by Prime Minister Jawaharlal Nehru to assist displaced persons during Partition. Today, PMNRF primarily provides immediate relief to families affected by natural calamities like floods, cyclones, and earthquakes, as well as victims of major accidents and riots.

Unlike government-budgeted funds, PMNRF consists entirely of voluntary contributions from individuals, organizations, trusts, companies, and institutions. It receives no budgetary support from the government. Contributions to PMNRF are eligible for 100% tax deduction under Section 80(G) of the Income Tax Act, 1961. The Prime Minister chairs the fund and all disbursements require the PM’s approval.

PM CARES Fund 🔗

The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, established in March 2020 during the COVID-19 pandemic, has emerged as another significant funding source. Chaired by the Prime Minister with key cabinet ministers as trustees, PM CARES can provide relief during any emergency, calamity, or distress situation. The fund accepts voluntary contributions, including CSR funds from corporations, and donations are tax-deductible under Section 80G.

International and NGO support 🔗

When major disasters overwhelm national capacities, international assistance becomes crucial. India engages with multiple international stakeholders while balancing sovereignty concerns and maintaining its growing role as a humanitarian provider rather than just a recipient.

United Nations agencies 🔗

Several UN agencies play significant roles in disaster management support for India. The United Nations Development Programme (UNDP) works on disaster risk reduction and building institutional capacities for resilience, implementing programs like the Disaster Risk Reduction Programme and Climate Change Adaptation initiatives.

The UN Office for the Coordination of Humanitarian Affairs (OCHA) coordinates international humanitarian response through mechanisms like the Central Emergency Response Fund (CERF), which can release aid within hours of a crisis. Since its establishment, CERF has provided over $9 billion in assistance across more than 100 countries.

Other key UN entities include UNICEF for protecting children during disasters, the World Food Programme (WFP) for emergency food assistance, and WHO for coordinating health emergency responses. The UN Office for Disaster Risk Reduction (UNDRR) provides policy frameworks like the Sendai Framework for Disaster Risk Reduction, which India has adopted.

International financial institutions 🔗

The World Bank provides both financial resources and technical assistance for disaster management through initiatives like the National Cyclone Risk Mitigation Project (NCRMP). These partnerships support capacity building and infrastructure development that incorporates disaster resilience.

India has also taken leadership in establishing the Coalition for Disaster Resilient Infrastructure (CDRI), a global partnership announced at the UN Climate Action Summit in 2019. CDRI brings together national governments, UN agencies, multilateral development banks, and the private sector to promote infrastructure resilience against climate and disaster risks.

Civil society and NGO networks 🔗

Non-governmental organizations form a critical component of India’s disaster response ecosystem. Organizations like Goonj, SEEDS (Sustainable Environment and Ecological Development Society), Care India, and Oxfam India provide immediate relief including food, water, shelter, and medical assistance, while also focusing on long-term recovery and resilience building.

Sphere India, a national coalition of humanitarian actors, coordinates the efforts of 155 member organizations including UN agencies, international NGOs, national NGOs, academic institutions, and sector networks. This coordination helps bridge gaps between government capabilities and community needs, especially during the chaotic initial phases of disaster response.

Faith-based organizations like Ramakrishna Mission and various community groups often mobilize quickly during disasters, providing grassroots-level support that complements formal humanitarian channels.

Corporate and voluntary contributions 🔗

The private sector has emerged as an increasingly important player in disaster relief funding in India, particularly following the Companies Act of 2013, which mandated Corporate Social Responsibility spending for qualifying businesses.

Mandatory CSR spending 🔗

Under Section 135 of the Companies Act, 2013, companies with net worth above Rs. 500 crore, turnover exceeding Rs. 1,000 crore, or net profit above Rs. 5 crore must spend at least 2% of their average net profits of the past three years on CSR activities. Disaster relief qualifies as an eligible CSR expenditure, creating a significant potential funding pool.

India’s total CSR spending increased to Rs. 29,986.92 crore in FY 2022-23, up from Rs. 26,579.78 crore in the previous year. Private companies contributed 84% of total CSR spending. While education and healthcare receive the largest shares, disaster management remains a recognized funding category.

Public sector undertakings 🔗

Public sector companies play a significant role in disaster relief contributions. Major PSUs like Oil and Natural Gas Corporation (ONGC), Coal India Limited, and Power Finance Corporation allocate substantial portions of their CSR budgets to disaster relief. During the COVID-19 pandemic, several public sector banks and PSUs, including State Bank of India, Life Insurance Corporation, and other entities, contributed significantly to the PM CARES Fund.

Corporate foundations and direct response 🔗

Large Indian corporations have established dedicated disaster response protocols. The Tata Group, known for spending 5-7% of its profits on CSR activities, has been a pioneer in corporate disaster response. Corporate foundations like the Azim Premji Foundation, HCL Foundation, and Hindustan Unilever Foundation channel substantial funds toward disaster relief and recovery.

Industry associations like the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce & Industry (FICCI) often coordinate private sector disaster response efforts, enabling rapid mobilization of resources across multiple companies.

Individual and voluntary donations 🔗

Beyond institutional contributions, individual citizens contribute significantly during emergencies. The PMNRF and state-level Chief Minister Relief Funds accept voluntary donations, with tax benefits encouraging public participation. Crowdfunding platforms and digital payment systems have made it easier for individuals to contribute during crisis situations.

Challenges and the path forward 🔗

Despite the multi-layered funding architecture, several challenges persist. Coordination gaps between different funding sources can lead to duplication or gaps in assistance. Regulatory requirements like the Foreign Contribution Regulation Act (FCRA) add complexity for NGOs receiving international funding. Many organizations struggle to secure resources for long-term recovery after the immediate response phase ends.

The geographic disparity in CSR spending, with industrial states like Maharashtra and Gujarat receiving more attention, means that some disaster-prone but economically weaker regions remain underserved. Greater transparency in fund utilization and better coordination mechanisms between government, international agencies, and private sector contributors would strengthen India’s overall disaster financing ecosystem.

What do you think? How can India better coordinate its multiple disaster funding streams to ensure faster and more equitable distribution of relief? What role should technology play in improving transparency and tracking of disaster relief funds?

References

1. https://ndmindia.mha.gov.in/ndmi/response-fund
2. https://www.drishtiias.com/daily-updates/daily-news-analysis/disaster-relief-funds-from-the-centre-1
3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2112256
4. https://pmnrf.gov.in/en/
5. https://www.pmindia.gov.in/en/pms-funds/
6. https://pmcares.gov.in/en/web/page/about_us
7. https://www.un.org/en/our-work/deliver-humanitarian-aid
8. https://www.un.org/en/global-issues/crisis-and-emergency-response
9. https://vajiramandravi.com/current-affairs/national-disaster-response-force-ndrf/
10. https://give.do/discover/news/indias-disaster-warriors-disaster-management-ngos-in-india/
11. http://www.sphereindia.org.in/
12. https://indiainvestmentgrid.gov.in/csr
13. https://missionsustainability.org/blog/csr-in-india/
14. https://csrbox.org/Impact/description/Article_full_Top-50-Companies-in-CSR-Activities-Funding-in-India_36