Disaster Preventionand Management

Riskmanagement for vibrant economic growthand sustained developmentPiyoosh RautelaDepartment of Disaster Management, Disaster Mitigation and Management Centre,Government of Uttaranchal, Uttaranchal Secretariat, Dehradun, India

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Disaster Prevention and Management, Vol. 15 NO.4, 2006,~ Emerald Group Publishing Limited, 0965-3562

Disaster Prevention and Management An InternationalJournal, sets out to advance the available knowledge inthe fields of disaster prevention and management andto act as an integrative agent for extant methodologiesand activities relating to disaster emergency and crisismanagement. Publishing high quality, refereedpapers, the journal supports the exchange of Ideas,experience and practice between academics,practitioners, and policy-makers.

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Risk management for vibranteconomic growth and sustained

developmentPiyoosh Rautela

Department of Disaster Management,Disaster Mitigation and Management Centre,

Government of Uttaranchal, Uttamnchal Secretmiat, Dehmdun, India

AbstractPurpose - The paper seeks to makes a correlation between poverty; and disaster-induced losses andto clearly put forth a hypothesis for deepening poverty in India; the disaster - poverty cycle, and tosuggest that India would perpetually remain a developing nation unless attempts are made to reducethe burden of disasters on the public exchequer. A practical strategy is put forth for disrupting thedisaster - poverty cycle through appropriate risk management measures. This is envisaged to bettercompensate the disaster victims besides significantly reducing the burden upon public exchequer. Thepaper thus aims at contributing to economic growth and development of India.Design/methodology/approach - Based on the reviewof the practices in other nations as also inIndia a strategy is proposed for disrupting the disaster - poverty cycle so as to accelerate economicgrowth and development of the nation.Findings - Experience the world over suggests that risk management is the key for reducing theburden on the public exchequer as also for minimising the misery and trauma of the masses exposed todisasters. Risk management has been split into two parts; risk reduction and risk transfer. The formeraims at reducing the misery of the masses apart from lessening the burden of post-disasterreconstruction while the latter aims at significantly reducing the burden on the public exchequer asalso the trauma of the disaster victims by way of introducing compulsory insurance cover for allresidential units.

Research limitations/implications - The paper attempts to put forth a blue print of a strategy fordisrupting the disaster - poverty cycle. Open debate on this important issue is intended to be initiatedso as to improvise the strategy in view of the ground realities and past experiences so as to evolve apractically applicable strategy. Together with this the financial implications and practical constrainsin implementation have to be probed in detail before putting the same into actual practice.Practical implications - Besides highlighting the need for reducing the burden of disasters on thepublic exchequer the paper highlights the shortcomings in the relief package at present being offeredby the state to the disaster victims in India. The state should come forward with instruments thatbetter compensate for the individual losses of the disaster victims. Public opinion would at the sametime force the state to devise ways of minimising the burden of disasters on the public exchequer andthe ensuing enactments would pave way for vibrant economic growth and development of India. Thisdebate would also lead to refinement of the strategy proposed in this paper so as to make it practicallyapplicable and acceptable.

The author thanks Professor Ravindra Kumar Pande, Executive Director, Disaster Mitigationand Management Centre for constant guidance, support and encouragement. The Department ofDisaster Management of the Government of Uttaranchal is thanked for cooperation. All hiscolleagues at DMMCare thanked for encouraging him to write and painstakingly going throughthe draft and suggesting improvements. Ravish Sharma is thanked for vital inputs andsuggestions on the subject matter of this paper. Lastly, the author's family members, Manisha,Putput and Chutput are also thanked.

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Disaster Prevention and :\1anagernentVol. 15 No.4, 2006

pp. 585.597C Emerald Group Publishing Limited

0965-3562DOl 10.1108109653560610685910

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Originality/value - Based on experience in the field of disaster management the paper hasinnovativelyput forth a sound correlationbetweenincreasingfrequencyand tollof disasters and thedeepeningpoverty of India.This economiccorrelation(disaster - povertycycle)is sure to invoketheinterest of the various stakeholderson this important issue. The paper thus reflects the author'sunderstanding of the issues related to disaster management.

Keywords Insurance,Disasters,Risk,Riskmanagement,India

Paper type Generalreview

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Disaster scenario in IndiaThe planet earth evolved as a result of a major disaster (bigbang) and the extinction ofspecies on this planet is often attributed to disasters. Disasters are thus no stranger forthe planet earth, as also for its inhabitants. The human race has witnessed disastersfrom their very advent on this planet. Human civilizations flourished on the bounty offloods and were often blotted off from the face of the earth by disasters. Earthquake,landslide, cyclone, tsunami and others are no alien to human beings and these oftencompelled human populations to observe, innovate and evolve ways (sometimesveryingenious) of protecting their interests at the face of disasters. This led to the evolutionof the traditional system of resource management that is fine tuned to the localgroundrealities. Indigenous systems of resource management are observed almost everywhereacross India (as also in other parts of the globe)but are more pronounced in close knitcommunities. These systems draw strength for their maintenance and continuancefrom kinship bonds with an appeal to the religio-magical sanctions, practices andbeliefs. With the fragmentation of the community, largely due to the advent of modemeconomy, the age-old practices have been relegated to the back seat and often dubbedas being unscientific (Rautela,2005;Rautela and Pande, 2005).This is often responsiblefor aggravating the fury as also frequency of disasters (Rautela and Paul, 2001).

India represents a nation with striking physiographic and climatic diversity. Theelevations range from sea level to the lofty Himalayas while the climate varies fromdesert type to tropical and alpine. This diversity results in India witnessing widevariety of natural disasters. Himalaya, the northern frontier of India (Figure 1) is theresult of subduction of the India plate beneath the Eurasian plate and its consequentcollision (continent - continent collision) with the same, consuming the interveningTethys Sea (Thakur, 2001). This resulted in upliftment, deformation, dislocation(thrusting and faulting) and metamorphism of the intervening sediments. These haverendered this terrain highly fragile and thus prone to mass wastage. Ongoing north -northeastward drift of the Indian plate and the resulting built up of strain makes thisterrain vulnerable to earthquakes (Bilham et al.,2001).The region has witnessed fourgreat earthquakes (magnitude > 8 on Richter Scale) in the past (1897 Shillongearthquake, 1905 Kangara earthquake, 1934 Bihar-Nepal earthquake, 1950 Assamearthquake) apart from the lesser events (1991Uttarkashi earthquake, 1999Chamoliearthquake). The rest of the nation is not free from the threat of earthquakes and in thepast earthquakes (1967 Koyana earthquake, 1993 Latur earthquake, 1997Jabalpurearthquake, 2001 Bhuj earthquake) have devastated intra-cratonic areas hithertoconsidered to be safe from seismic threat.

The hilly terrain is also prone to flash floods that are owed to the breach of landslidedams and glacial lakes apart from cloudburst. The monsoon season (rainy season inthe Indian sub-continent) often accompanies landslides in the Himalayan mountainrange as also in the Ghats (both western and eastern). These gravity driven movement

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IndianOceanof rock mass and debris take heavy toll of human lives and infrastructure during themonsoon season when increased pore water pressure facilitates down slope massmovement.

Located to the south of the Himalayas and formed mainly by the alluvial deposits ofthe Himalayan rivers the Indo-Gangetic alluvial plains (Figure 1) are prone to floodsthat are generally associated with monsoonal rains. As is evident from increasing toll,the flood situation shows worsening trend with each monsoon (Figures 2 and 3).Human quest for reducing the fury of floods, by attempting to tame the streams andrivers through erection of mechanical barriers, has contributed to this. Though wellintentioned these measures have adversely affected both the carrying capacity and thechannel depth of the rivers that aggravates the fury of floods in the Indo-Gangeticplains.

Unprecedented rains in the year 2005caused massive flooding even in areas that arenot considered to be vulnerable to floods (Maharashtra, Gujarat and Andhra Pradesh;Figure 1)apart from routine flooding in Uttar Pradesh, Bihar, Assam and West Bengal.

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Figure1.Map showing the political

boundaries and majorphysiographic divisions ofIndia referred to in the text

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Figure 3.Decadaleconomiclossesin India due to floods

Source: CRED database ofEM-DAT; http://ww.em-dat.net

The coastal states of India have repeatedly witnessed the devastation caused bycyclones (1864 and 1942 West Bengal cyclones, 1971 Orissa cyclone, 1977 AndhraPradesh cyclone,1999Orissa super cyclone)and together these have taken toll of morethan 150,000human lives. During the previous year the coastal states of India evenwitnessed the fury of tsunamis generated on the aftermath of 26 December, 2004Sumatra earthquake (magnitude 9.0 on Richter scale; source: USGS;http://earthquake.usgs.gov) that took heavy toll in Tamilnadu and Andaman and Nicobar Islands.

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The above narration clearly depicts the variety of natural disasters faced byIndia and the review of the database suggests that there has been a sharp rise in thetoll of disasters in the previous decades (Figures 4 and 5) despite increasingawareness and scientific advancement. The economic toll of the disasters has been

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Figure4.Human toll in India due to

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staggering to levels where the state finds it increasingly hard to muster resources formanaging these events.

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The disaster - poverty syndromeDisasters are not secular and thus the entire community is not similarly affected.Disaster impact is understood to be a function of the vulnerability of the masses thatdepends upon the likelihoodof hazard and the capacity of the people to anticipate, copewith, resist and recover from the impact of the hazard (Blaikie et aL, 1994).Vulnerability of the community is the most critical factor influencing the disasterimpact upon human interests and, therefore, all risk reduction related efforts revolvearound reducing the vulnerability of the masses. Vulnerability of any communitystems from its geographical (spatial) location, socio-economic condition and thestructures possessed. As discussed earlier entire Indian subcontinent is prone tohazards of various kinds, socio-economic condition as also quality of life of themajority of the people is deplorable (Human Development Report, 2005)and majorityof the people live in nonengineered masonry houses. All these contribute towards thevulnerability of the masses. Burgeoning population, concentration of population aturban and proto-urban centres, unplanned growth, rampant unemployment (oftenunder employment) and consequent low incomes, low awareness levels, inappropriaterules as also inadequate enforcement and implementation of these further enhance thevulnerability of populace in India to disasters. This enhanced vulnerability isresponsible for increasing frequency and toll of the disasters in the recent years.

Large proportion of the population in India lives in poverty (daily earnings of 79.9per cent of the population being less than US$2; Human Development Report, 2005).The socio-economicallyweaker sections of the community are often forced to dwell inareas more prone to disasters while the safer places are occupied by the well offsections of the community. The weaker sections of the community have little resilienceto disasters and their awareness levels are often low. Poor population groups are thushighly vulnerable to disasters. It is, therefore, the poor population that suffers the mostat the face of disasters and these events lead to heavy loss of their material resources.

At present there exists no mechanismin India for compensatingthe lossesincurredby individualsdue to disasters and the state simplyextendsreliefthat isoften notional. RS.10,000(1 US$ - RS.48) is provided as relief to the one who hasincurred complete loss of his dwelling unit due to disaster while RS.50,000is given asrelief to the next of kin of the one loosing life in the event of a disaster (http://ndmindia.nic.in). The relief provided to the disaster victims is grossly inadequate.Poverty makes these population groups vulnerable to disasters and the poor are theworst affected by disasters. It is far harder for the poor to replace their assets than itis for either the rich or the government that can rebuild public assets merely bytaxing everyone. The loss of assets at the face of disasters further enhances thepoverty of this already impoverished group and this enhanced poverty leads to theirvulnerability levels being further enhanced (Figure 6). So with each disaster thepoverty levels and the vulnerability of the poor get enhanced. The disaster - povertycycle clearly illustrates this interrelationship between disasters and deepeningpoverty. It is this disaster poverty syndrome that is responsible for deepeningpoverty of the masses in India and unless something concrete is put forth to disrupt

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the disaster - poverty cycle there seems no hope of these vulnerable sections of thesociety getting into the mainstream of the national economy.

Disaster impact on developmental schemes in IndiaIt is universally agreed that the economic impact of disasters is rising globally(Figure 7) despite a sharp decline in global death toll of disasters (Figure 8). Eventhough the economic toll shows rising trend in developed nations as well their humantoll has registered a sharp decline.Disasters take much larger share of the GDP of thedeveloping nations and thus the economic impact is more on the economies of thedeveloping world.

At present there exists no mechanism in India for compensating the losses incurredby the individuals due to disasters as also for lessening the burden upon the publicexchequer and the state is expected to provide relief to the disaster victims, apart fromrebuilding the public infrastructure. The disasters thus force the state to divertresources earmarked for developmental schemes for post-disaster relief andreconstruction related initiatives.

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Figure6.Schematic diagram

depicting disaster -poverty cycle

Figure 7.Global decadal economic

losses due to disasters

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Figure 8.Global decadal human tolldue to disasters

.

Source: CRED database ofEM-DAT; http://ww.em-dat.net

The state has no doubt set apart a separate kitty for disaster related affairs (CalamityRelief Fund - CRF and National Calamity Contingency Fund - NCCF; http://ndmindia.nic.in)but the quantum of funds available are inadequate as compared to theresources actually needed for these operations and, therefore, the state is forced tosqueeze resources set apart for development This retards and even hampers the paceof development and as the nation suffers massive disasters in quick succession theresources fall squarely short of what are needed to mount massive reconstructionexerCIse.

Previousone year (2004-2005)has beenparticularlydevastatingfor Indiawhenitwitnessed the fury of tsunami, floods and earthquake apart from the other routinedisasters. The tsunamis were caused by the earthquake that struck around 6.29 AM(1ST)on 26 December 2004 (magnitude 9; USGS;http://earthquake.usgs.gov) and hadits epicentre off the west coast of Sumatra Islands (Indonesia).The massive earthquake(fourth largest in the world since 1900;USGS;http//earthquake.usgs.gov) set off gianttsunami waves that hit southern, eastern and southwestern coastal areas of Indiawhere the peoplewere unprepared to deal with this unexpected and unfamiliar disasterof this magnitude. Not being a member state of the International CoordinatedGroup forthe Tsunami Warning System India had no access to prior warning of the impendingdisaster. There had been extensive loss of life, especially amongst fisher folk in thesoutheastern coastal areas of the country that is estimated to be more than 15,000.There had also been extensive damage to private homes, fishing boats and nets, publicinfrastructure and farmlands. Apart from Andaman and Nicobar Islands the worstaffected state in the mainland was Tamilnadu although Pondicherry and AndhraPradesh were also affected. In the tsunami, 2,260km of the mainland coastline wasaffected. The losses caused by tsunami disaster in India are estimated to be more thanRS.67,080million (Asian Development Bank, 2005).

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Quick on the heels of tsunamis nature once again took the nation by surprise andthe 24 hours ending Wednesday, 27 July 2005 registered as much as 944.2mm rain inBombay that was the highest ever recorded precipitation in a single day in India. Theeconomic toll of the torrential rains and floods in several parts of Maharastra,particularly Mumbai and its adjoining industrial belts of Bhiwandi and Kalyan isestimated to be in excess of RS.43,500million (uS$1 - RS.48).

The Muzaffarabad Earthquake of 8 October, 2005 (magnitude 7.6 on Richter scale;USGS; http://earthquake.usgs.gov) shook the entire North India and Pakistan in theearly hours (09:20:401ST)and caused heavy losses in Pakistan andJammu and Kashmir.Human toll is estimated to be more than 86,000and the exact economiclosses are yet tobe estimated. The priliminary estimates put the losses in excess of 5 billion US$.

For better appreciating the impact of these devastations upon the national economythe losses have to be analysed in the light of the annual budgetary outlay of the UnionGovernment of India that is RS.5,143.44billion (RS.1,434.97billion being the planoutlay) for the financial year 2005-2006 (http://indiabudget.nic.in). The former twodisasters alone have cost the country around 3 per cent of the annual plan outlay of thenation. This loss is over and above the RS.42.67billion spent by the various statesevery year out of the CRF for post disaster relief, rescue, and reconstruction.

It may be noted that the finance commissionhas set apart a corpus of RS.5,OOOmillionunder NCCFand RS.213.33billionunder CRFfor the periodof fiveyears and the disastersare taking toll that is far in excess of the capital earmarked for tackling the disasters.

The alternatives for rejuvenating the economyDisasters are one of the many causes of deepening poverty in India and the state hasneither the resources nor the mechanism of adequately compensating the disastervictims for their individual losses. The burden upon the public exchequer is mountingand this is adversely affecting the pace of economic growth and developmentSustained economicgrowth of India warrants disruption of the disaster poverty cycleand reducing the burden of disasters upon public exchequer. Given below are someoptionsfor achievingthesegoals. '

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Reducing disaster lossesThe burden upon public exchequer on the aftermath of any disaster is a function of thelosses incurred and thus designing instruments for reducing disaster losses wouldnaturally reduce the burden upon public exchequer.

The state can bring forth reduction in the disaster induced losses by introducingappropriate and practical techno-legalregime that makes disaster resistant structurescompulsory. Various states in India have attempted to introduce regulations to thisregard. The state of Uttaranchal has enacted regulations making earthquake resistantconstruction compulsory in all urban areas but the complianceof the same could not beensured. Lack of political will, administrative foresight and stem punitive measuresapart from lack of awareness amongst the masses and inadequate staff for monitoringhave emerged as the main constrains.

The state can at the same time formulate a landuse policy that inhibits growth ofinfrastructure in areas prone to hazards and this would reduce disaster induced losses.

Experience suggests that the disaster loss reduction program cannot sustain on thebasis of regulations alone without its voluntary compliance by the masses. More than

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anything else the state has, therefore, to focus upon mass awareness programs. It isthrough these programs the masses have to be assured of the long-term benefits ofabiding by safety norms that would greatly reduce the losses in the event of any futuredisaster. Reduced toll of the disasters in times to come would compensate for theinvestment so made by the state.

Investment on disaster mitigation has the potential of significantly cutting shortdisaster induced losses. Though CRF has been placed in India at the disposal of therespective states for tackling the disaster situations there exists no institutionalmechanism for making funds available for undertaking mitigative measures. TheMinistry of Home Affairs, Government of India had proposed creation of a separateDisaster Mitigation Fund before the xn Finance Commissionbut the same was turneddown with theadvise that preparedness and mitigationbebuilt into the state plans and notas a part of the CRF.It has, however,allowedfor expenditure of a part of the CRF(10percent)on pre-disaster training of concernedstate government personnel and acquisitionofspecialisedsearch and rescue (S&R)equipments. Taking lead from this provision manystates have acquired S&R equipments that might be needed on the aftermath of a majordisaster. The State of Uttaranchal has at the same time initiated intensive S&Rtrainingprograms forits personnelso as to bring forthprompt and effectivepost-disaster response.

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Risk transfer for reducing burden upon public exchequer

The risk transfer approach addresses the issue of compensation of the losses of thedisaster victims without burdening the public exchequer. Though there existinstruments, it is the lack of awareness rather than lack of resources that desist peoplefrom opting for disaster insurance of their property. The masses tend to believe thatthe state would compensate them for the losses incurred to their property due todisasters. In India there, however, exists no provision of compensation and the statesimply extends relief to the disaster victims out of the funds available under CRF.Therelief package is governed by the guidelines issued by the Ministry of Home Affairs(Government of India) and the sum extended to a disaster victim is only RS.10,000forcomplete destruction of the dwelling unit by disaster and there is no provision ofextending any kind of relief for the loss of non-residential property of the individuals.This sum is barely sufficient to construct 20 square feet of dwelling and one cannotthink of replacing his destructed dwelling unit by the relief amount so received. Thus,the relief fails to satisfy the disaster victim while the public exchequer is taxed heavilyby the cumulative impact of the relief grants so extended. It, therefore, becomesimperative to think of practical solutions to this problem.

It is well accepted that insurance has the potential of greatly reducing burden uponthe public exchequer but it is an irony that India does not have an institutionalmechanism for insuring the poor (and even the not-so-poor) against disasters. Thiswould have been understandable and acceptable if there would not have been anymodels to emulate. But even that is not true and there exist a number of models in othercountries the most well known of which include the Turkish Catastrophic InsurancePool (TCIP)of Turkey, FONDENof Mexico, the Florida Hurricane Catastrophe Fund,the Hawaii Hurricane Relief Fund, the California Earthquake Authority, theEarthquake Commission (EQC)of New Zealand, Catastrophe Naturelles (CatNat) inFrance, and Norway's Norsk Naturskadepool.

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Each of these catastrophe insurance programs emerged on the aftermath of highlydevastating natural disasters to address the subsequent inability of the local insurancemarket to provide affordable catastrophe insurance coverage for a specific peril. TheTCIP was created on the aftermath of August 1999 Marmara earthquake. TCIPprovides insurance against earthquakes and its key feature is that the earthquakeinsurance cover is compulsory. All existing and future privately owned property,except for non-engineeredrural housing and fully commercial buildings, is required tocontribute to TCIP. The World Bank, the Turkish Government, private insurancemarkets and international re-insurers have contributed for developing this facility. It isbasically designed to provide immediate funding for rebuilding assets and to reducethe fiscal burden on the government. One important side-effector positive externalityis the emergence of better house-building standards.

Risk transfer has been shown to be an important instrument for reducing theburden of disasters upon public exchequer and a similar mechanism has to beformulated and introduced in India.

The practical propositions for revitalising economic growth in IndiaIt has been established that the pace of development in India is being severelyhampered by recurring disasters and this is seen as one of the main causes ofdeepening poverty of the nation. The disaster - poverty cycleneeds to be disrupted formaking a dent in the deepening poverty of the nation and bringing forth a perceptiblechange in the quality of lifeof the masses in India. Givenbelow are some measures thatare designed to lead the nation towards vibrant economic growth and development.

Techno-legal regimeThough public awareness has come forth on the aftermath of Bhuj and Pakistanearthquakes the state needs to invest for bringing forth public prospective on the need ofchange in our construction environment. Appropriate and practical disaster resistanttechno-legal regime needs to be enforced and monitored through trained manpower andaccountability needs to be established at every level for any lapses. This all should beaimed at ensuring that all new infrastructure in the country is disaster resistant.Assuming the life of the building to be 50 years and the growth of building stock to be 2per cent per annum, these measures would end up with 60 per cent of the building stockof India being disaster resistant without even resorting to retrofitting by the year 2025;,i.e. in 20 years to come Gain, 2005). The state should at the same time launch program ona mission mode to undertake retrofitting of critical infrastructure.

Disaster mitigation fundThough there exist institutional mechanisms in India for financing the post disasteroperations related to relief and rescue there exist no mechanism for fundingpre-disaster mitigation efforts. Large number of researches are presently beingundertaken in the nation for identifying high hazard zones but the state does not haveresources to implement the recommendations put forth by technical experts foraverting the disaster or minimising the disaster impact. It is, therefore, felt that thestate should formulate a disaster mitigation fund and the share of different states befixed on the basis of the disaster proneness of the same. A mechanisms should beinstituted for regular replenishment of this fund by empowering the respective statesto impose special tax for the same.

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This would empower the state with an instrument to reduce the impact of the futuredisasters and the post disaster burden upon the public exchequer would be reducedconsiderably.

Risk transferLow per capita income is the key constraint on insurance market development in India.Low-incomeconsumers have less discretionary income and fewer assets to insure andtherefore reach and service are expensive to the commercial insurers. To add to it theinsurance density or premium per capita depends on per capita income and it is hard toget around this core fact. Rampant poverty of the nation is a hard fact that cannot beignored.

The combination of mis-management and absence of market forces make insurancecompanies under capitalised in India and these are not in a position to compensate forlosses incurred by any massive natural disaster. This implies that re-insurance has tobe resorted to through the international market, where the prices have become veryvolatile due to the increasing frequency and scale of natural disasters. Internationalexperience suggests that state-mandated disaster insurance is the only viable optionfor India. Coverage has to be extended to the individuals for homes and its contentsagainst specific natural hazards. This would at the same time help alleviate politicalpressures for allocation of government resources after natural disasters forreconstruction of private housing and businesses.

A disaster pool can be created by the state for covering the disaster losses inpartnership with the various insurance companies. This pool can be contributed out ofthe funds available under NCCF.The insurance under this pool has to cover all theresidential buildings and the premiums should be subsidised. All the commercial andother state owned infrastructure has, however, to be insured on commercial rates.

The state should enforce compulsory disaster insurance upon all urban centreswhile the cost of rural insurance should be borne by the state. This can easily be donewith the funds available under CRF.In the post-disaster phase the individuals have toincur additional cost for maintaining their standard of living and the insurance covershould be tailored to cover this cost by way of including a provision of additional livingexpenses (ALE)for the disaster victims for the period in which they are forced to stayaway from their dwellings. ALE coverage has to be designed to pay for the costassociated with living somewhere else while repairs are being made in the damagedhouse. The disaster victim would incur additional living cost and the ALE has to be sodesigned to maintain the standard of living one had before the disaster damaged thedwelling and possessions. ALE can cover the following:

cost of temporary rental home;restaurant meals;

utility installation at the temporary residence; and

relocation and storage.

Payment of ALE coverage has to be limited to the reasonable time required to repair orrebuild the disaster struck dwelling unit or for one to permanently settle in anotherresidence. The inbuilt provision of ALE would further reduce the pressure upon publicexchequer as the state would be relieved of the pressure of arranging for temporaryaccommodation, food and services for the disaster victims.

In order to safeguard the disaster pool from solvency in the event of a major disasterreinsurance has to be resorted to with international agencies.

Hazard characterization

Hazard maps define probability of OCCUITenceof a hazard at a given location in thespecified time frame and these are helpful for assessing differential disaster risk atdifferent locations. Hazard characterisation would serve two significant purposes.These can be used by the state for regulating growth of infrastructure in areas prone tohazards while the insurance companies can adjust their premium rates fornon-residential, commercial and government infrastructure based upon thedifferential hazard probability. This on the one hand would provide the insurancecompanies with commercialedge while the individuals would be naturally discouragedto invest in high hazard prone areas.

Once enacted the above strategy would be greatly reducing the burden upon publicexchequer while the disaster victims would be adequately compensated for theirindividual losses. The proposed scheme would be disrupting the disaster - povertycycle by compensating for the losses incurred due to disasters and thus the disasterswould not be impoverishing the victims. At the same time the state would not be forcedto divert the funds earmarked for development. This would thus lead to enhanced ratesof economic growth and development in India.

References

Asian Development Bank (2005),ADB India Economic Bulletin, Vol. 3 No.1, p. 32.

Bilham, R., Gaur, VK. and Molnar, P. (2001),"Himalayan seismic hazard", Science, Vol. 293,pp.I442-4.

Blaikie, P., Cannon, T., Davis, I. and Wisner, B. (1994),At Risk: Natural Hazards, People'sVulnerabilityand Disasters, Routledge, London.

Human Development Report (2005),International Cooperationat Cmssroads; Aid, Trade andSecurity in an Unequal World, United Nations Development Programme, New York, NY,p.372.

Jain, SK. (2005),"The Indian earthquake problem", Current Scimce, Vol.89 No.9, pp. 1464-6.

Rautela, P. (2005),"Indigenous technical knowledge inputs for effective disaster management inthe fragile Himalayan ecosystem",Disaster Preventionand Management: An Intemationaljournal, Vol. 14 No.2, pp. 233-41.

Rautela, P. and Pande, RK. (2005),"Traditional inputs in disaster management: the case ofAmparav, North India", The Internationaljournal of Environmental Studies, Vol.62 No.5,pp. 505-15.

Rautela, P. and Paul, SK. (2001),"August 1998 landslide tragedies of Central Himalaya (India):learning from experiences", The bztel7lationaljournal of Environmental Studies, Vol. 58,pp. 343-55.

Thakur, V.c. (2001),Geologyof Westenz Himalaya, Pergamon Press, New York, NY, p. 355.

Corresponding authorPiyoosh Rautela can be contacted at piyooshrautela@hotmail.com

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