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Drought in 10 states may impact economy by Rs 6,50,000 cr

india Updated: May 11, 2016 16:05 IST

Prime Minister Narendra Modi participates in a high-level meeting to discuss on the drought situation, in New Delhi on Tuesday. (PTI)

Drought in 10 states is estimated to impact the economy by at least Rs 6,50,000 crore since approximately 33 crore people across 256 districts are bearing its brunt, a study has revealed.

Due to two consecutive years of poor monsoon, water shortage in reservoirs as well as lowering of ground water table has created a serious challenge for the drought-affected areas in 10 states including Maharashtra and Karnataka, the study by Assocham said.

“The rough estimate indicates that this drought will cost national economy at least Rs 6,50,000 crore or USD 100 billion,” it said.

Read: Frame national policy to address drought: Supreme Court to govt

The impact of drought is likely to remain for at least six months more because one needs resources and time to revive the activities on ground even if the monsoons are predicted to be normal this year, it said.

“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 month. With the population of 33 crore at risk, the estimated cost to economy will be about Rs 1,00,000 crore per month,” 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 possible migration to other places puts additional pressure on urban infrastructure and supplies.

There is likely an impact on children and women health besides farm debt increase due to loss in livestock and farm economy in the drought-hit districts, it said.

Read: 6 yrs on, 41 Maha villages wait for their share of water

Read: Don’t blame nature for the drought in Bundelkhand