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PM for a mechanism to provide risk insurance

Prime Minister Manmohan Singh today favoured setting up of a mechanism to provide risk insurance and contingent credit facilities to people affected by disasters, saying such steps of immediate funding would reduce suffering of people after any calamity.

delhi Updated: May 13, 2013 13:05 IST

Prime Minister Manmohan Singh today favoured setting up of a mechanism to provide risk insurance and contingent credit facilities to people affected by disasters, saying such steps of immediate funding would reduce suffering of people after any calamity.

He said there was need for greater attention about arrangements for providing funds to people so that they are able to cope with the losses they suffer due to natural disasters.

"The current systems, particularly at the national level, lack institutional incentives and do not promote mechanisms such as risk insurance and contingent credit facilities. The development of such ex-ante arrangements is particularly important because they typically serve as a primary source of immediate funding that would reduce human suffering, economic losses and fiscal pressures in the aftermath of natural disasters," Singh said.

The Prime Minister said managing disasters was necessarily a collaborative and complex exercise, involving not only several departments of the government at the Centre but also state and local governments, civil society organisations, local communities and the people at large.

"I believe that while we have made encouraging progress in recent years in putting in place institutions and mechanisms for disaster prevention and mitigation, we have still a large distance to travel," he said, inaugurating the first session of National Platform for Disaster Risk Reduction.

The Prime Minister said disaster management was an area of vital national importance to India since the country was vulnerable to a large range of natural and man-made disasters and it has suffered a lot due to earthquakes, floods, droughts, cyclones, landslides and industrial accidents.

"In recent years, climate change has posed fresh new challenges that our disaster management strategies should be able to cope with. These are in the form of the increased intensity and frequency of disasters like floods, cyclones and droughts.

"It is estimated that the chances of future extreme events would be much higher than what they are today because of the changes that continue to occur in our climate patterns.

We must, therefore, ensure that disaster preparedness and development of adequate disaster response mechanisms receive priority attention," he said.

Singh said the 12th Plan carries this process further and it specifically focused on the new developments that have taken place in the area of disaster risk reduction, including those related to setting up of early warning systems and communications.

"It also mainstreams disaster risk reduction in some of our major development programmes. For example, the Mahatma Gandhi National Rural Employment Guarantee Scheme now includes drought mitigation efforts as an eligible activity allowed to be taken up under the scheme, he said.

The Prime Minister said the integration of disaster risk reduction strategies into country's development initiatives must necessarily involve actively the local communities.

"We must, therefore, make full use of our Panchayat Raj institutions to achieve this objective," he said.