Assocham: Drought has trickle-down effect on economy

Says the drought is estimated to impact the economy by at least Rs 6.5 lakh crore

Drought in 10 states is estimated to impact the economy by at least Rs 6.5 lakh crore, with 330 million people across 256 districts facing a grim situation, an Assocham study has revealed.

Two consecutive years of poor monsoon, water shortage in reservoirs as well as lowering of groundwater table have created challenges to drought-affected areas in 10 states, the study said. The loss of subsidies on power, fertiliser and other inputs multiply the impact, it added. On the economic impact of drought, the study said the financial resources get diverted from development to aid, and the possible migration puts pressure on urban infra and supplies.
 

The drought would create inflationary pressures, making food management a challenge for the government and policymakers, it added.