Disasters and Financing are deeply interconnected.A major Disaster affects the economy of the nation as a whole and at the same time a effective disaster financing mechanism can restrict the impact of a disaster to a great Degree. The Indian Subcontinent is among the world''s most disaster prone areas, with 54% of land vulnerable to earthquakes, 8% vulnerable to cyclones and 5% vulnerable to floods.unique geo- climatic conditions make this region among the most vulnerable to natural disasters in the world. Also the fact that a majority of the people in the rural areas of India stil remain poor necessiates a effective disaster financing system for effective disaster recovery. The study attempts to understand the disaster financing system - its concepts and its operationalisation at the grass root level through the case study of a disaster affected village in Konkan Region in Maharashtra State. The study focuses on the effectiveness of the Disaster Financing mechanisms in immeiate relief post the disaster as well as in the rehabilitation process analysing the gaps that exixt and also looks at alternatives to fill them.