Timely release and utilisation of disaster management funds play a crucial role in disaster mitigation in a highly disaster-prone state like Assam. Wide gaps in disaster fund management in the state, as revealed in a recent report of the Comptroller and Auditor General (CAG), expose a recurring pattern of administrative weakness. The CAG found that not following the State Disaster Response Fund (SDRF) Guidelines hurt fund transparency and lowered potential interest earnings, highlighting the urgent need for the state government to fix these problems to better prepare financially for disaster response. Multiple waves of floods, which recur every year, leave a trail of devastation, damaging houses; cause breaches in embankments; damage public buildings, roads, bridges and other infrastructure; displace affected people from their homes to take shelter in makeshift relief camps; and destroy standing crops and render vast stretches of paddy field unsuitable for paddy cultivation. For a resource-deficit state, judicious utilisation of every rupee provided by the central government for disaster management is critical for building resilience and strengthening preparedness. The SDRF guidelines require the state government to transfer the central government share along with their matching share to the public account head within 15 days of its receipt. Any delay will require the state government to release the amount, with interest, at the bank rate of the RBI for the number of days of the delay. The guidelines further require that the money left in SDRF balances must not be kept idle and should be invested either in central government bonds, treasury bills, or fixed deposits in scheduled commercial banks so that interest is earned on unspent SDRF money. The CAG, however, found that at the end of 31 March 2025, a balance of Rs 1,112 crore remained uninvested, contrary to the provisions in the Guidelines. The CAG observed that the state government did not invest SDRF balances as per guidelines and did not pay half-yearly interest, which showed the state forfeited substantial interest earnings for disaster projects. The guidelines for administering the State Disaster Mitigation Fund (SDMF) require that the state invest the money in SDMF, along with any interest earned, in central government bonds and other approved investments. By March 2025, the CAG found the SDMF accumulated Rs 342 crore, but it was not invested, so no interest was earned to strengthen the SDMF amount. Since the state government is in charge of disaster management according to the National Disaster Management Policy, it must ensure that the SDRF and SDMF are used properly and follow the set rules and guidelines. The state government is required to undertake relief measures with the SDRF fund. The guidelines restrict utilisation of SDRF money only for immediate rescue and rehabilitation measures and temporary restoration measures, while funds released under SDMF are allowed to be utilised for structural and non-structural risk prevention by undertaking preventive measures like construction, strengthening and repair of embankments, flood zone mapping, etc. When the SDRF fund is fully utilised, it is replenished with a fresh allocation from the National Disaster Response Fund when the calamity is of a severe nature. Similarly, NDMF supplements SDMF if the state can justify its requirements. Due to climate change impact, rise in population, and infrastructure growth, the scale of devastation in the state has also increased significantly, requiring more funds for immediate relief and rehabilitation when major floods break out. The expanding scale of destruction and danger demands that the state leave no room for any underutilisation or mismanagement of funds made available through both the SDRF and SDMF windows. Additional funds from NDRF are released only after the interministerial central team, which carries out an on-the-spot assessment of the damage and destruction in the event of a high-flood situation, is informed. To ensure a smooth flow of funds from the central government, the state government must tighten disaster fund utilisation and strictly adhere to all the norms prescribed in the guidelines. As the central government applies the norm of deducting 50% of the unspent amount while releasing the disaster fund for the new financial year, the state loses claims for a higher amount for the following year if it is unable to fully utilise the released funds. The Assam State Disaster Management Authority builds the capacity of its officials and employees at all levels, including the districts, for strict adherence to financial norms prescribed in the guidelines for SDRF. SDMF is critical to guarantee that there is no shortage of funds for immediate relief and rehabilitation works, and the state also strengthens its capacity for disaster-risk reduction.