This year’s severe drought cost the Indian economy at least Rs 6,50,000 cr

A study has revealed that the severe drought in 10 states of India has impacted the economy by at least Rs 6,50,000 crore, affecting about 33 crore people from 256 districts, reveals an Assocham study.

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

Two consecutive years of poor monsoon has led to water shortage in majority of Indian reservoirs, and has also lowered the ground water table, thus posing a serious threat to the already drought-affected areas in as many as 10 states, including Maharashtra, Telangana, and Karnataka, the study by Assocham said.

The impact of this drought is likely to stay for at least six more months, given the time it takes for resources and time to revive the activities on ground, despite the fact that monsoon this year is predicted to be normal.

"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 impact is likely to be multiplied by the loss of subsidies on power, fertiliser and other inputs.

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