Over the past five years, the increased frequency of extreme weather events has led to a growing number of disasters hitting several Indian cities. The rise of unchecked construction over natural drainage channels, reduction of green cover, and gaps in public finance to fund suitable infrastructure magnify the impact in terms of the disruption caused to the lives of vulnerable communities in these cities. To mitigate these impacts, Indian cities must go beyond the use of concrete or grey infrastructure and focus more on resilient infrastructure, which refers to systems and structures designed to withstand, adapt to, and rapidly recover from natural and human-induced disasters.
This includes the right mix of nature-based solutions such as restoring floodplains and lakes, maintaining and expanding permeable surfaces that allow for the percolation of water to the subsurface, as well as effective drainage systems, alongside increasing urban green cover. Along with this, Indian cities must budget for infrastructure upkeep from day one to avoid the costly build–neglect–rebuild cycle that most Indian infrastructure is trapped in.
India already has promising examples of alternative, community-oriented climate resilience. Near Pulicat Lake in Tamil Nadu, there exists a community-led nature-based bio-shield planted using a variety of species, including casuarina and fruiting trees. This has effectively reduced the impact of storm surges while also improving local food security. In Delhi, the Archaeological Survey of India and SEEDS restored the Hauz-i-Shamsi lake through low-cost measures such as dredging, bio-filters, fencing, and catchment mapping. The project improved water quality, created an urban climate buffer, and revived a bird habitat.
Local restoration projects show what’s possible, but scaling them requires strong support and funding from national disaster agencies and local governments. India’s disaster management policy framework recognizes that local governments, particularly Urban Local Governments (ULGs), are pivotal in funding, implementing, and maintaining resilient urban infrastructure. This has been outlined in the National Disaster Management Plan (NDMP) 2019 issued by the National Disaster Management Authority (NDMA), which identifies ULGs as frontline stakeholders in disaster management, especially in local mitigation planning. ULGs can leverage this role and access funds from their respective State Disaster Mitigation Funds (SDMFs) to implement mitigation projects like urban flood control or early warning systems. However, these mitigation funds are not enough to meet the needs of building resilient infrastructure in India.
{{/usCountry}}Local restoration projects show what’s possible, but scaling them requires strong support and funding from national disaster agencies and local governments. India’s disaster management policy framework recognizes that local governments, particularly Urban Local Governments (ULGs), are pivotal in funding, implementing, and maintaining resilient urban infrastructure. This has been outlined in the National Disaster Management Plan (NDMP) 2019 issued by the National Disaster Management Authority (NDMA), which identifies ULGs as frontline stakeholders in disaster management, especially in local mitigation planning. ULGs can leverage this role and access funds from their respective State Disaster Mitigation Funds (SDMFs) to implement mitigation projects like urban flood control or early warning systems. However, these mitigation funds are not enough to meet the needs of building resilient infrastructure in India.
{{/usCountry}}India can finance resilient infrastructure at scale using new sources of funding such as bond markets, insurance, and carbon credits. Indore Municipal Corporation's 2023 green bond attracted ₹720 crores in bids --almost six times the base issue. Smaller and mid-tier cities can raise money together through shared funding arrangements that spread risk and lower costs by accessing the bond market. In 2002, Tamil Nadu’s Water and Sanitation Pooled Fund issued a 15-year pooled bond worth ₹304.1 crores on the domestic capital market for 13 municipalities and town panchayats. This bond issuance helped these smaller local governments access long-term financing, setting a model for funding in India’s water and sanitation sector.
The use of insurance can act as an investment against risks caused by disasters. One example of this is parametric insurance, which provides rapid pay-outs once specific disaster-related data, such as wind speed or rainfall level triggers, are reached. It ensures quick pay-outs to vulnerable communities as it requires no assessment of the extent of loss caused by the disaster. Jan Sahas, in collaboration with Digit Insurance and KM Dastur, implemented a parametric insurance program for migrant workers in Noida, Uttar Pradesh, against excess heat, providing a crucial social protection buffer during heat waves.
Indian cities can also leverage nature-based projects they are working on by earning carbon credits through measuring the carbon captured by these initiatives and then selling these credits to raise additional funds. An example of this can be seen in the Gujarat Forest Department's carbon credit MoUs worth ₹2,217 crores through mangrove plantation.
The 15th Finance Commission (FC) allocation of ₹32,031 crores to state disaster mitigation funds for 2021–26 is a step forward but still far short of the resources required for resilient urban infrastructure across India. Every rupee invested in resilience today can save many more in avoided damage, displacement, and economic disruption. With credible financing mechanisms and strong governance frameworks, India’s cities can turn today’s climate risks into an engine for safer and cleaner growth.
This article is authored by Aditya Verghese, head, Centre of Excellence, Public Finance, Sustainable Environment and Ecological Development Society (SEEDS).