The impact of HIV and AIDS on economic growth is small in South Asia, where less than 0.5 per cent of the population is infected, reports the World Bank’s
HIV and AIDS in South Asia: An Economic Development Risk
released on Saturday.
“For India, the effect on GDP (0.16 per cent) corresponds to a one off loss of about 1.5 weeks of GDP growth but the welfare cost is high. The direct welfare cost of early death and lower life expectancy may be as high as 3-4 per cent of India’s GDP,” said Dr Mariam Claeson, regional coordinator, South Asia, World Bank.
It predicts that the cost of treatment could rise to US $1.8 billion by 2020, corresponding to 1.2 per cent of India's total health expenditure. “Something needs to be done about patents on AIDS drugs. The cost of second line antiretroviral drugs is phenomenal and if they are not made affordable, India may go the Thailand and Brazil way, where 75 per cent of the AIDS budget goes into treatment,” said National AIDS Control Organization Director General Sujatha Rao, speaking at the launch of the report.
NACO has a budget of Rs 1,100 crore, of which about 30 per cent is spent on giving free treatment to 200,000 people with HIV and AIDS. According to NACO’s 2007 estimate, about 2.31 million people have HIV and AIDS in India.
The World Bank calculates that the annual cost of the mental trauma caused by HIV and AIDS per year, with 0.36 per cent of the population affected, is Rs 1,999.8 billion (7 per cent of the GDP), which is more than the annual health expenditure of Rs 1,356 billion (2004) for all ailments in India.
NACO’s Rao says it is absurd. “I don’t agree. It’s absurd… Economists love to quantify everything, from the cost of listening to western classical music to listening to Carnatic music, and that’s what they have done here. This figure is based on indicators of mental health based on self reported occurrence of some feelings. It’s very abstract,” she said.
What the report does well is focus on the micro-impact of disease and the need to provide social security to the poor to keep them healthy and prolong life. Medical expenses for people with HIV, for example, account for 11 per cent of household income as compared to 3 per cent for families not affected by HIV.