Drought to cost Rs 6.5 lakh crore to Indian economy

Widespread drought will impact the Indian economy at least by Rs 6,50,000 crores (about $ 100 billion) as about 33 crore people across 256 districts are facing the grave situation, according to an Assocham study.
 
In the pre-monsoon season, weekly rainfall for the country as a whole during the last week of April 2016 was 19 percent lower than Long Period Average (LPA). Rainfall (percentage departure from LPA) in the four broad geographical divisions of the country during the above period was higher by 38 percent in East & North East India and lower by 89 percent in South Peninsula, 78 percent in Central India, 61 percent in North West India.
   
Recent estimates indicate that the current water shortage both in reservoirs as well as lowering of ground water table has created a serious challenge for the drought affected areas in 10 states. D S Rawat, secretary general, Assocham, said the drought would create inflationary pressures making the food management an imperative challenge for the government and the policy makers.
 
Let us assume that government will spend just Rs 3000 per person to cover water, food, health for these people for one or two month. With the population of 33 crores at risk, the estimated cost to economy will be about Rs 100,000 crores per month. The loss of subsidies on power, fertiliser and other inputs due loss of crop multiply the impact.
 
Estimates may vary depending upon the assumptions. While making any assumption one will have to include the following loss of man-days, cost of health, cost of livestock and their fodder, loss of productivity of land, animals, water bodies and people, increased burden on health services, revival from crisis of nutrition, fodder shortage and revival of rural economy, cost of displacement, etc.
 
It is clear that these 33 crore people need water and food for their existence and they purchasing power has vanished. Both of this will have negative impact on economy, said Rawat.
 
Lack of focus on natural resources will hurt the economic growth very seriously. Depleting soil health, water levels and air pollution will create inflationary pressures and will hurt Indian competitiveness. Corporate India must look at these aspects for their own existence, noted the study.