USD 100 billion - Economic Impact of Drought yet no Plans

USD 100 billion is the Economic Cost of 2016 Drought in India

Yet no Implementation Plans to prevent the same in future is visible, just plans and promises on paper

Author has made some assessment, placing before you for your comments and feedback. Share with others if you like it.

Government and planners are stuck in the game of averages and ignoring the ground reality. It is of new use of average if one area is flooded and other is suffering from drought. Average may seem comfortable on paper, but fact is on both ends people are suffering. 
Panic is setting in:
The ground situation is so frightening that Ministry of Agriculture has stopped reporting area under crop from the weekly weather reports in recent weeks. Why they stopped sharing information with people? What is the motive?

Let us analyse the situation with facts:

Current water shortage both in reservoirs as well as lowering of ground water table has created a serious challenge for all. The current drought situation has affected about 33 crore people across 256 districts in 10 states.

According to a well-known expression, Rome's emperor at the time, the decadent and unpopular Nero, “fiddled while Rome burned.” The expression has a double meaning: Not only did Nero play music while his people suffered, but he was an ineffectual leader in a time of crisis. Today, we have popular leader, but then why all this?  It is painful to travel now-a-days in remote India.
Dry hot land, skinny people, no water, hot sun, no fodder, no income..

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.

The silence in urban area and impress that food inflation is under control is a serious ignorance on part of the many. Demand supply situation is becoming complex with every passing day. No one is realizing the challenge it will put on economy to reengaged these people in meaningful employment.

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.

Let us analyses the same with facts on ground.

Region wise Pre-monsoon status:

·        In the pre-monsoon season, weekly Rainfall for the country as a whole during the last week of April, 2016 was 19% lower than Long Period Average (LPA). Rainfall (% departure from LPA) in the four broad geographical divisions of the country during the above period was higher by 38% in East & North East India and lower by 89% in South Peninsula, 78% in Central India, 61% in North West India.

·        Whereas last year 2015, In the pre-monsoon season, cumulative weekly Rainfall for the country as a whole during the last week of April 2015 was 47% higher than Long Period Average (LPA). Rainfall (% departure from LPA) in the four broad geographical divisions of the country during the above period was higher by 228% in Central India, 98% in South Peninsula, 23% in East & North East India and lower by -11% in North West India.

Cumulative Rainfall for the country as a whole

·        The cumulative rainfall in the country during the pre-monsoon season i.e. since 01st March, 2016 till April end was 8% lower than Long Period Average (LPA). Rainfall (% departure from LPA) in the four broad geographical divisions of the country during the above period was higher by 8% in East & North East India, 4% in North West India and lower by 70% in South Peninsula, 31% in Central India.

·        Whereas in the pre-monsoon season, cumulative Rainfall for the country as a whole during the period 1st March to last week of April’2015 was 89% higher than Long Period Average (LPA). Rainfall (% departure from LPA) in the four broad geographical divisions of the country during the above period was higher by 223% in Central India, 140% in North West India, 122% in South Peninsula and 6% in East & North East India.

Agro-climatic Zone wise rainfall:

·        This year 2016, Out of 36 met sub-divisions, 14 met sub-divisions constituting 40% of the total area of the country has received excess/normal rainfall, 22 met sub-divisions constituting 60% of the total area of the country has received deficient/scanty rainfall.

·        In the year 2015, Out of a total of 36 met sub-divisions, 36 met sub-divisions constituting 100% of the total area of the country has received excess/normal rainfall.

Water level in reservoir:

·        Central Water Commission monitors 91 major reservoirs in the country which have total live capacity of 157.80 BCM at Full Reservoir Level (FRL). Current live storage in these reservoirs as on 28 th April, 2016 was 32.39 BCM as against 50.95 BCM on 28.04.2015 (last year) and 42.01 BCM of Normal (average storage of the last 10 years) storage. Current year’s storage is 64% of the last year’s storage and 77% of the normal storage.

·        Whereas the live storage in these reservoirs as on 30th April, 2015 was 48.63 BCM as against 53.36 BCM on 30.04.2014 (last year) and 40.49 BCM of normal (average storage of the last 10 years) storage. In April 2015, water storage was 91% of the last year’s storage and 120% of the normal storage.

The worst part is there is no effort to improve the reservoir capacity this country.

Water level in Reservoirs is at dangerously low level:

·        As of April’2016, there were 34 reservoirs having storage more than 80%, 16 reservoirs having storage between 50% to 80% of Normal Storage, 27 reservoir having storage between 30% to 50%, 14 reservoir having storage upto 30% of Normal Storage and 05 reservoir having no live storage.

·        In April 2015, There were 66 reservoirs having storage more than 80%, 14 reservoirs having storage between 50% to 80% of Normal Storage, 07 reservoir having storage between 30% to 50% of Normal Storage and 04 reservoir having storage 30% or below of Normal Storage and 01 reservoir having no live storage.

Economic Impact of Drought:

·        33 crore people need support for existence it means about 25% of Indian people need help in the food, water, medicine. This will divert financial resources soft h states from development to aid.

·        Even if 10% of these people migrate of other places, there will be massive socio-economic challenges in urban centers.

·        This will put pressure on urban infrastructure, over strengthen water and food supplies in cities will come under further pressure and crime rate is likely to go up.

·        Overall health, mainly for children, women and other aged people will be a serious social challenge and cost to economy.

·        Livestock and agriculture economy in these districts will also suffer and debt trap will increase in these areas.

Let us put some numbers to these issues:

Mitigation Cost:

Let us assume, 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, fertilizer and other inputs due loss of crop multiply the impact.

Revival Cost:

Let us assume that monsoon will be normal this year as predicted. You will need resources and time to revive the activities on ground. The impact can last for another one more season i.e. minimum 6 months.

The rough estimate indicates that this drought will cost national economy by at least Rs. 650,000 crores or say USD 100 billion.

Estimates may vary depending upon the assumptions. While making any assumption please 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.

The Way Forward:

Every Member of parliament, MLA and local Magistrate must submit weekly report on what they have done to conserve water in their area and what is the water level status in their areas. This may look very stupid but this will ensure economic growth and prosperity in the region. Nothing can exist without water. Moon and Mars are examples with us.

This will also help us in understanding what is actually done on the ground by policy makers and people's representatives. All data at panchayat level should be placed on internet under Digital India and e-governance program to monitor the claims made by MPs and MLAs and to monitor the progress by local people themselves. 

Alternate approach is:

Let transparency emerges in crisis management, otherwise, everyone loves crisis and drought for obvious reasons. 

Any suggestion from your end on this vital subject is always welcome. Write in comments section.