Why in news?

Recently, the Ministry of Home Affairs informed the Lok Sabha that heatwaves and lightning have been added to India's list of notified natural calamities, expanding the total list to 14.

This follows a recommendation by the Sixteenth Finance Commission (FC-XVI) and operational guidelines issued on June 30. Combined with the 2024 amendment to the Disaster Mitigation Fund guidelines, heatwaves are now eligible for the full State Disaster Risk Management Fund pool.

What’s in Today’s Article?

• India's Disaster Finance Architecture
• Heat's Earlier Disadvantage
• India's Growing Heat Exposure
• What States Can Now Fund?
• The Road Ahead: Four Priorities
• Conclusion

India's Disaster Finance Architecture

• Under Article 280 of the Constitution, the Finance Commission recommends arrangements for disaster management funds.
• The FC-XVI recommended ₹2.04 lakh crore for State disaster funds over the five years from 2026-27 to 2030-31 — nearly 28% higher than the previous Commission's allocation.
• This corpus is split into two components:
  • State Disaster Response Fund (SDRF) — ₹1.6 lakh crore, meant for immediate response, relief, and reconstruction following a disaster
  • State Disaster Mitigation Fund (SDMF) — the remaining amount, meant to fund longer-term interventions that reduce the risk of a climate event escalating into a disaster
• These funds are available to all States, with inter-State distribution determined by a formula incorporating a disaster risk index (accounting for hazard frequency, intensity, exposure, and vulnerability) along with States' expenditure during the previous Commission's tenure.
• Separately, the FC-XVI recommended ₹79,406 crore for national disaster funds over the same period, which States can access when a disaster's severity exceeds their own resources — as Kerala did following the 2024 Wayanad landslides.

Heat's Earlier Disadvantage

• Heat previously occupied an awkward position in this system.
• States could notify a heatwave only as a "local disaster" and draw on the SDRF — but subject to a cap of just 10% of their annual allocation, and only after establishing separate compensation norms for loss of life or crop damage.
• Other notified disasters like floods and cyclones faced no such ceiling. The new notification removes this asymmetry, placing heatwaves on par with other disasters.

India's Growing Heat Exposure

• India's exposure to extreme heat is rising sharply. Using 35 indicators spanning climate change, exposure, and vulnerability, experts estimate that over 57% of Indian districts — home to roughly three-fourths of the population — face high to very-high heat risk.
• The number of hot days annually has increased, alongside a rise in very warm nights and relative humidity, which reduces the human body's ability to recover after heat exposure.

What States Can Now Fund?

• The National Disaster Management Authority has directed all States, districts, and cities to develop Heat Action Plans (HAPs) that map heat risk and vulnerability and identify short, medium, and long-term interventions.
• So far, 300 cities and districts across 23 heatwave-prone States have HAPs.
• However, implementation has lagged due to limited technical capacity, competing priorities, and inadequate funding — a 2023 review found that 79% of HAPs simply asked city departments to self-allocate funds, without dedicated financing.
• The new Central notification provides two clearer financing routes:
  • Under the SDRF: States can provide relief and compensation for heat-related losses
  • Through the SDMF: States can finance longer-term risk-reduction measures such as cooling shelters and early-warning systems
• State Disaster Management Authorities and State Emergency Operations Centres will serve as the nodal agencies managing both funds.

The Road Ahead: Four Priorities

• Expand heat planning
  • While 12 States have notified heatwaves locally, only about 300 cities and districts have HAPs — leaving roughly 4,800 urban local bodies and 800 districts without one.
  • Heat-specific SDMF guidelines are still awaited, though existing norms require risk and vulnerability assessments before projects can be proposed — precisely the groundwork HAPs are designed to provide.
• Convert plans into fundable projects
  • States need model mitigation proposals tailored to local climate and geography.
  • Since many local bodies lack the technical capacity to prepare such proposals, research institutions, NGOs, and philanthropic organisations could offer technical support and risk capital to help translate plans into appraisable projects.
• Strengthen health surveillance
  • Accurate loss-and-damage data will now determine relief payouts.
  • The Health Ministry's surveillance system, covering over 51,000 reporting units, recorded 4,853 heatstroke cases and 20 confirmed heatstroke deaths between March 1 and July 26 — but it does not capture the broader burden of heart, lung, and kidney conditions aggravated by heat.
• Link heat solutions to other schemes and adopt fast-payout tools
  • States should identify convergence with existing government development programmes and deploy pre-agreed instruments like parametric insurance, which pays out automatically once a set temperature threshold is crossed.
  • Similar tools already exist for other hazards — Nagaland, for instance, operates rainfall insurance that pays out when rainfall crosses a defined threshold.

Conclusion

The formal notification of heatwaves as a natural calamity marks a significant step in aligning India's disaster finance architecture with its growing climate risk profile.

However, expanded funding eligibility alone will not suffice — States must urgently scale up Heat Action Plans, build technical capacity to convert plans into fundable projects, strengthen health surveillance, and adopt innovative instruments like parametric insurance to ensure this financial window translates into effective, on-ground heat resilience.