This report examines the fiscal risks that disasters pose to Tamil Nadu and identifies strategies to enhance financial resilience. The state faces recurring threats from floods, cyclones, droughts, tsunamis, and landslides, which have caused significant damage to infrastructure and increased public expenditure.
Using historical data, economic analysis, and catastrophe risk modelling, the report assesses impacts on key sectors, particularly roads and power infrastructure. It finds that disaster-related losses can strain government budgets, increase borrowing requirements, and exceed available disaster relief resources. Floods and cyclones emerge as the most significant risks.
The study highlights gaps in existing financing mechanisms and recommends integrating disaster risk into fiscal planning, strengthening resilient infrastructure investments, improving hazard and loss data systems, expanding insurance and contingent financing options, and adopting a risk-layering approach to better manage future climate and disaster-related financial shocks.
Key points
- Disasters create substantial fiscal risks, increasing public expenditure burdens.
- Floods and cyclones pose the greatest threats to infrastructure resilience.
- Recovery costs often exceed available disaster financing mechanisms significantly.
- Power and transport sectors face recurring climate-related damage risks.
- Risk-informed planning can reduce losses and strengthen resilience outcomes.
- Insurance, contingency funds, and risk layering improve preparedness.
