Funding early warning in India: SDRF, NDMF and SDMF

A district disaster management authority decides that its main river needs water-level stations and sirens upstream of the towns. The plan is sound, but one question stalls it: which budget pays? Many officers have heard of the SDRF and the NDMF and are unsure which of them, if either, can buy and keep an early warning system. This article explains how disaster funding in India is organised, what the mitigation fund is meant for, and where a flood warning project fits.

How is disaster funding organised in India?

Disaster funding in India rests on the Disaster Management Act, 2005, which provides for response funds and mitigation funds at national and state level. Every five years the Finance Commission recommends how much each state receives, and the Ministry of Home Affairs (MHA) issues guidelines on how the money is held and spent. The four funds you will meet are:

The mitigation funds are the newer element. The Act provided for a National Disaster Mitigation Fund (section 47) and state mitigation funds (section 48) [1][2], but they went unfunded for years. In 2016 the Supreme Court noted that no National Disaster Mitigation Fund had been constituted and directed the Union to set one up [1]. The Fifteenth Finance Commission then made a mitigation fund part of the award for 2021-22 to 2025-26 [4][1].

What did the Finance Commissions decide?

For 2021-26, the Fifteenth Finance Commission recommended ₹160,153 crore for state disaster funds and ₹68,463 crore for the national funds. It divided the state amount 80:20 between the SDRF and the SDMF, and the national amount in the same way [4][2][3]. The SDMF therefore received ₹32,031 crore across all states [2]. Of the national total, ₹54,770 crore went to the NDRF and ₹13,693 crore to the NDMF [3].

The Sixteenth Finance Commission, whose report is dated November 2025, kept the 80:20 split for states. It recommended ₹163,521 crore for the SDRF and ₹40,880 crore for the SDMF over 2026-27 to 2030-31, and ₹79,406 crore for the national funds [3]. The Commission also recommended that preparedness and capacity building, which had been a window inside the response funds, should now come under the SDMF and NDMF because it is pre-disaster work [3].

Mitigation money has not always moved as fast as response money. The Sixteenth Commission found that central releases to the SDRF were 95-100 per cent of allocation for most states in 2021-22 to 2024-25, but releases to the SDMF were around 80 per cent, mainly because some states were late in constituting the fund and the operating guidelines were issued late [3]. Utilisation was also low [3].

How do the Centre and states share the cost?

Under the 2022 guidelines for the SDMF, the Centre pays 75 per cent and the state 25 per cent. In the North-Eastern and Himalayan states, which include Himachal Pradesh, the split is 90:10 [2]. The Fifteenth Commission's award used the same shares for the SDRF and SDMF [4]. For assistance from the NDMF, a state adds a graded share: 10 per cent for Union assistance up to ₹250 crore, 20 per cent up to ₹500 crore and 25 per cent above that. The Sixteenth Commission kept this graded scale but recommended that North-Eastern and hilly states contribute a flat 10 per cent of all such assistance [3]. The state's contribution to its own fund is paid into the Public Account in two instalments a year, and the Centre's share is released only after the state certifies that the fund is notified and reports its spending [2].

What is the mitigation fund for?

The SDMF is "exclusively for the purpose of mitigation projects" for the disasters covered under the SDRF and NDRF guidelines, plus any local disasters the state notifies. The MHA guidelines say it should be used for "local level and community-based interventions", and that large works such as coastal walls and flood embankments belong in regular development schemes [2]. The notified disasters include flood, cloudburst, landslide, avalanche, cyclone and drought, among others [2].

The NDMF sits above the state funds. The Fifteenth Commission earmarked parts of it for four priority areas: drought in the twelve most drought-prone states, seismic and landslide risk in ten hill states, urban flooding in the seven most populous cities, and erosion [3]. The MHA has since added programmes of its own, including one for glacial lake outburst floods and one for lightning safety [3].

Can the mitigation fund pay for a flood early warning system?

Yes, for flood-related work the guidelines point directly at it. The SDMF guidelines list projects that "build community resilience through information and knowledge" among the eligible categories. For flood mitigation projects they say states should undertake non-structural measures, including a "real time hydro-meteorological data acquisition network coupled with decision support system" for reservoir operation, and the delineation of floodplain zones [2]. The Sixteenth Commission's review notes that states have used the SDMF for installing alarm systems and Doppler radars, among other projects [3].

The guidelines also set limits that shape any warning project [2]:

• At least 10 per cent of each year's SDMF must go to non-structural measures: knowledge, planning, warning and training rather than concrete.
• No more than 50 per cent in a year may go to one hazard, unless MHA relaxes the rule.
• Up to 5 per cent may go to a small-grants window for innovation, technology, research and community leadership.
• The fund cannot pay for general environmental improvement, existing schemes or ongoing programmes, or the salaries and office costs of disaster authorities.
• It should generally not be used for maintenance and upkeep of structures; new projects are funded, and upkeep must come from other sources.

The last point matters for early warning, because a network of sensors and sirens needs batteries, calibration, repairs and data services every year. A project that wins capital funding but has no operating budget will degrade. The better proposals state in advance which budget head will carry the running costs. We discuss this in the total cost of a monitoring network.

A worked example with the limits (illustrative)

The Sixteenth Commission gives Himachal Pradesh an SDMF allocation of ₹108 crore for 2026-27 [3]. Suppose, for illustration only, that the 2022 guidelines' limits still applied to that year:

Annual SDMF allocation                     = 108.0 crore
Minimum for non-structural measures (10 %) =  10.8 crore
Small-grants window, at most (5 %)         =   5.4 crore
Maximum for any single hazard (50 %)       =  54.0 crore

Under these limits, a state could not put more than ₹54 crore into flood projects in that year without MHA relaxation, and a river-warning network would count towards the ₹10.8 crore non-structural minimum. The limits work as a planning tool: they show how a proposal sits within the year's envelope.

How does a project get funded?

The SDMF is operated by the State Executive Committee, in consultation with the State Disaster Management Authority, which appraises, monitors and supervises the projects [2]. The NDMA is to issue technical guidelines and hazard-specific mitigation guidance for project preparation [2]. In practice a district or department prepares a project report, and the state authority appraises it against the guidelines before the fund releases money. Proposals fit more easily when they:

1. Trace the project to a risk assessment and to the state's disaster management plan, since the guidelines link mitigation strategy to risk assessment [2].
2. Name the hazard, the settlements and the people the system protects.
3. Show how the warning reaches people: sensors alone do not warn anybody, as how a flood early warning system works explains.
4. Specify the equipment by performance, so that more than one supplier can bid; see writing a technical specification for a hydromet tender.
5. State who owns the data and who pays for operation after year one.

States may also pool money into the SDMF from other sources, including corporate social responsibility funds and contributions from implementing partners, and they are asked to allocate resources to districts for preparedness and mitigation each year [2]. Real-time data networks run by the states themselves are described in real-time data acquisition systems in Indian states.

What should districts watch for?

Three things recur in the Finance Commission's own review. First, spending has lagged: late guidelines and late constitution of funds slowed the SDMF [3]. Second, the Commission wants projects taken up under the funds to be completed, with more flexibility in selection and execution [3]. Third, the rules keep moving: the Fifteenth Commission's guidelines were framed for 2021-26, and the Sixteenth Commission's changes, such as moving preparedness and capacity building under the mitigation funds, mean that the operating guidelines for the current period should be read from the MHA before drafting a proposal [2][3].

Key points

• The SDRF and NDRF are response funds. The SDMF and NDMF are mitigation funds under sections 48 and 47 of the Disaster Management Act, 2005.
• Of the state total, 80 per cent goes to the SDRF and 20 per cent to the SDMF, for both the 2021-26 and 2026-31 awards.
• Under the 2022 SDMF guidelines the Centre pays 75 per cent, and 90 per cent for North-Eastern and Himalayan states.
• The SDMF guidelines name real-time hydro-meteorological data networks and community-resilience projects among eligible non-structural flood measures.
• The fund is not meant for maintenance or establishment costs, so a warning proposal must show how it will be operated.

Where ClimMaTech fits

ClimMaTech works on river monitoring and flood warning for hill catchments. Our flood warning solution page describes how level and velocity sensing, sirens and alerts fit together for a river reach, which is the kind of non-structural project a district can take to its state authority.

References

1. National Institute of Disaster Management, Disaster Mitigation in India: A Financial Viewpoint under the 15th Finance Commission (seminar report, 21 October 2022), quoting the Supreme Court's 2016 order in Swaraj Abhiyan v. Union of India. nidm.mha.gov.in
2. Ministry of Home Affairs (Disaster Management Division), Guidelines on Constitution and Administration of the State Disaster Mitigation Fund (SDMF), letter No. 33-02/2020-NDM-I, 14 January 2022 (copy hosted by Darrang district, Assam). Cover letter and paras 1-8; paras 9-11
3. Sixteenth Finance Commission, Report for 2026-27 to 2030-31, Volume I: Main Report, chapter 11 "Financing of Disaster Management", Government of India, 2025. indiabudget.gov.in; allocations by state in Volume II: Annexures, annexure 11.4. indiabudget.gov.in
4. Finance Department, Government of Tamil Nadu, Gist of the Fifteenth Finance Commission Main Report along with Action Taken Report, September 2021, recommendations 6-16 on disaster risk management. financedept.tn.gov.in