Insulate urban poor from climate shocks

The unexpected downpour that Delhi-National Capital Region (NCR) experienced in September-October wrought severe civic disruptions. In the last year, cities such as Mumbai, Hyderabad, Pune, Lucknow and Bengaluru (which suffered heavy showers and flooding once again this week) were roiled by similar climate-hit disruptions. Earlier in the year (March-May), north India was baked by a severe heat wave that shrivelled the wheat crop. Such extreme weather events — which are increasingly becoming common due to the climate crisis — are causing a loss of workdays, livelihoods, housing and critical economic assets. The economic impact only gets compounded by health impacts: Increased morbidity and mortality from vector-borne diseases and heat strokes. Vagaries in climate affect all, but hit the poorest and the vulnerable the worst and reduce their chances of improving their socioeconomic status.

To help the poor — who stay in areas with minimal civic amenities and crisis response systems — weather the impact of such climate-related events and build long-term resilience, the government should consider an urban job plan along the lines of the Mahatma Gandhi National Rural Employment Guarantee Act. Under the climate urban job plan, the State should provide employment for 100 days or compensation in case of non-provision of jobs.

Housing and asset loss and damages are other significant concerns, especially during floods. An insurance scheme can boost resilience at the household level. There are insurance products that cover both house and household assets, but not many people avail of them. Given the heterogeneity of the clientele, the industry must design products for specific segments. Here again, the State may have to intervene to address the needs of those with the lowest purchasing power. A Prime Minister Grih Bima Yojna for the poor must be instituted on the lines of Prime Minister Fasal Bima Yojna.

The speed of response remains the most critical factor for addressing the vulnerabilities of the poor. Delayed response aggravates losses and protracts rehabilitation, adversely affecting resilience. Therefore, reducing the time between exposure to climate risk and the accrual of benefit is necessary — whether from the State or insurance firms. The direct benefit transfer architecture can be leveraged, expanding its scope in response to the policy action. The insurance industry can plug into the State delivery system. However, simplifying the process of claim-making is essential. The traditional evidence-based process of claim-making that requires receipts to prove the value of the assets or verification of the extent of damage will not work in these altered situations.

A recent Supreme Court observation — crop losses are human problems and corporate conditions can’t be used for farmers — while directing an insurance firm to pay compensation to farmers in Osmanabad, Maharashtra, paves the way for process reforms in the industry. Satellite imagery could be used to identify flooded areas, and government databases of such localities could be used to identify beneficiaries. Insurance claims could be directly transferred without the beneficiary raising a claim. This is possible and would require a new purpose-driven data-sharing agreement between the State and the industry.

As extreme events become more frequent, newer mechanisms are needed for shock-proofing the poor. Sufficient response and synergies between the State’s policy imperatives and the insurance industry are necessary for easing the vulnerabilities of the poor. Leveraging technology and partnerships between State and industry can facilitate speedy and timely responses to climate calamities and build the resilience of the urban poor.

Dharmendra Chandurkar is co-founder and chief knowledge officer, Sambodhi Research.

The views expressed are personal.