The State Disaster Response Fund (SDRF) and State Disaster Mitigation Fund (SDMF) are the two State-level funds through which India finances disaster management, set up under the Disaster Management Act, 2005, on the recommendation of successive Finance Commissions.

Basic Details

  • Launched and implemented by: Ministry of Home Affairs (Centre) and State Governments; administered by State Governments under the oversight of the respective State Disaster Management Authority.
  • Launched in: The SDRF was constituted under Section 48(1)(a) of the Disaster Management Act, 2005. The SDMF was created on the Fifteenth Finance Commission's recommendation, with funds first allocated in February 2021.
  • Type of fund: Statutory, Finance-Commission-recommended funds, not a one-time scheme — the corpus is replenished each Finance Commission cycle.
  • Financial outlay (2026-27 to 2030-31): The Sixteenth Finance Commission (FC-XVI) recommended ₹2.04 lakh crore for State disaster funds, of which ₹1.6 lakh crore goes to the SDRF and the remainder to the SDMF.

Aim and Objectives

  • To ensure States have immediate, ring-fenced funds for relief, response and reconstruction after a notified disaster, through the SDRF.
  • To fund longer-term interventions that reduce the risk of a hazard turning into a disaster, through the SDMF, rather than only respond after the fact.
  • To align India's disaster finance with a risk-based, data-driven distribution formula rather than an ad hoc, discretionary one.

Key Features

  • Funding pattern: For general-category States, the Centre contributes 75% of the SDRF and SDMF corpus and the State 25%; for north-eastern and Himalayan States, the split is 90:10.
  • SDRF's use: Funds immediate relief and compensation for 13 notified disaster types — cyclone, flood, drought, earthquake, landslide and others; States may also use up to 10% of their annual SDRF allocation for a locally-notified disaster.
  • SDMF's use: Funds mitigation and risk-reduction works, such as early-warning systems and protective infrastructure, and, since August 2026, cooling shelters for heat.
  • Distribution formula: The Finance Commission allocates funds between States using a disaster risk index, built from the frequency and intensity of hazards, exposure, vulnerability, and States' past disaster-management spending.
  • Central releases: The Centre's contribution to the SDRF is released to States in two equal instalments each year.

Significance

  • Risk-Reduction Shift: The SDMF marks a shift in India's disaster finance from pure post-disaster relief (SDRF) toward funding prevention before a hazard strikes.
  • Heat's Inclusion: Heatwaves and lightning were added to India's list of notified natural calamities on 4 August 2026, making them eligible for the full SDRF-SDMF architecture for the first time, rather than being capped at 10% of the SDRF as a "local disaster."
  • Implementation Dependency: Because SDMF projects need a risk and vulnerability assessment before funding, a State's disaster-mitigation capacity — such as a completed Heat Action Plan — still limits how much of the fund it can actually use.