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16th Finance Commission Allocates ₹2,04,401 Cr to SDRF; Flags Structural Flaws in Disaster Risk Index Formula

Target:UPSC GS-IIIMPSCSSC GATeachingPrelims HighMains HighStatic GK Link
31 Mar 2026
~2 min
Source: The Hindu
Key Data:₹2,04,401 crore59.5%1.57 percentage points574.7 km
Bodies:Finance CommissionNDMAIPCCBMTPCIMD
Practice MCQs from today's news ▸
What This Article Covers

1.The 16th Finance Commission allocated ₹2,04,401 crore to State Disaster Response Funds (SDRF), a 59.5% increase, but its Disaster Risk Index formula is flawed.

2.Odisha, with the highest hazard score, saw the largest reduction in funding share (down 1.57 percentage points) because the formula uses total population as a proxy for exposure, not hazard-zone population.

3.The multiplicative DRI formula (Hazard × Exposure × Vulnerability) effectively penalizes smaller, wealthier states and fails to allocate funds based on actual disaster risk, creating a critical policy gap for climate-vulnerable states.

The Big Picture
Prelims · HighMains · High

The 16th Finance Commission's ₹2,04,401 crore allocation for State Disaster Response Funds uses a flawed Disaster Risk Index. The formula rewards population size over actual hazard exposure, causing highly vulnerable states like Odisha to lose funding share despite high risk. This is a critical flaw in disaster finance ahead of intensifying climate threats.

Exam Lens

Quick Exam Facts From News

16th FC SDRF Allocation₹2,04,401 crore
Increase Over 15th FC59.5%
Odisha's Funding Share Loss1.57 percentage points
Odisha's Hazard Score (Highest)12
Odisha's Coastline Length574.7 km

1-Minute Revision

  • ›16th FC SDRF Allocation: ₹2,04,401 crore
  • ›Increase Over 15th FC: 59.5%
  • ›Target this Data: ₹2,04,401 crore (16th FC SDRF allocation) and 59.5% increase.
  • ›Target this Nodal Body: Finance Commission (Constitutional body under Article 280).
  • ›Target this Legal Point: State Disaster Response Fund (SDRF) constituted under the Disaster Management Act, 2005.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which constitutional body is responsible for recommending allocations to the State Disaster Response Fund (SDRF)?

Q2Statement-basedHard

Consider the following statements regarding the 16th Finance Commission's disaster funding allocation:

1. It allocated ₹2,04,401 crore to State Disaster Response Funds, representing a 59.5% increase over the 15th Finance Commission's allocation.

2. Its Disaster Risk Index formula uses total state population as the measure for 'Exposure', as recommended by the IPCC's Sixth Assessment Report.

3. Odisha, despite having the highest hazard score in the country, received the largest reduction in its disaster funding share.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the article, what is the total allocation made by the 16th Finance Commission for State Disaster Response Funds (SDRF)?

Q4Application/ImpactMedium

What is the primary criticism of the 16th Finance Commission's Disaster Risk Index (DRI) formula as discussed in the article?

All 25 MCQs ▸
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