A study by Assocham reveals that drought across 10 Indian states will have an impact on the Indian economy that can be quantified at Rs. 6.5 lakh crore (about $100 billion). Two years of bad monsoon and shortage of water in reservoirs has led to serious challenges in the affected areas in Karnataka, Uttar Pradesh and Maharashtra.
Around 33 crore people across 256 districts across the country are currently facing water shortage. "The rough estimate indicates that this drought will cost the national economy at least Rs. 6.5 lakh crore or $100 billion," Press Trust of India quoted the report as saying.
Loss of livestock and farm economy in the drought-hit states would impact debt. It would also impact women and children's health. The loss of subsidies of fertiliser, power and others would multiply the impact.
The financial resources diverted towards providing development and aid for the people would add to the burden, as would the migration of people to urban areas.
It will take some time and resources to restart activities the drought had brought to a halt, even though the monsoon this year is expected to be normal. The impact of the drought is likely to stay for at least another six months.
"Let us assume the government will spend just Rs. 3,000 per person to cover water, food, health for these people for one or two months. With the population of 33 crore at risk, the estimated cost to economy will be about Rs. 1 lakh crore per month," PTI quoted the Assocham report as saying.
Creation of food security would then become a challenge for the government and the policy makers.
[1 lakh = 100,000 | 1 crore = 10 million | 100 crore = 1 billion]