Most underrated risk to Indian economy– climate catastrophe!

Jun 30, 2024

A decade of unbearable heat

Ten consecutive years of high temperatures, touching the highest May this year is unquestionable evidence of the world becoming a disastrous place for living beings. The warming was not erratic, so we could have expected the reason for the heat was for some temporary reasons. We cannot hope for any reversal from this, nor can we construe this as an aberration, so there can be a reversal. The pent-up environmental damage was so heavy that it may only intensify the heat in the coming years. So let us ask: Where are we heading from this already unlivable 50-plus degrees Celsius?  

A fast-growing economy like India faces an insurmountable challenge due to the consistent rise in temperature. Three-quarters of the over 500 million workforce in India is engaged in heat-exposed activities. The heat rise will not spare any economy in the world. Somewhere, I read millions of people will lose their jobs in the coming years. Though there are estimates of 80 million job losses by 2030, I am afraid the number will be higher given the damage the heat has already inflicted. High temperatures will shave off at least four per cent of India’s GDP by 2030. Along with massive job loss and a decline in GDP, there will be a drastic deterioration in quality of life. Poor people will suffer the worst.      

In India, the temperature has already burned the economy to a great deal. In May 2024, the hottest month, the Reserve Bank of India estimated a five-month low in the services sector activities, which constitute two-thirds of the economy.  Manufacturing activities also fell to a three-month low in May. Footfalls on shopping floors fell drastically which naturally indicated a reduction in consumption. Extreme heat not only burned the agricultural fields, thereby producing. Lower crop production leads to high food inflation. There was a drastic decrease in the arrival of summer fruits. Fruits and vegetable markets looked dull because of the extreme heat. The situation was worse than all droughts in the past. Workers are unable to work in agricultural fields. 

There is no precise estimate of economic losses due to the untimely rains causing floods, glacier melting that floods rivers and tributaries, and typhoons. The untimely rains lead to crop losses due to delays in the arrival of the monsoon. We have seen these phenomena in the last five years. Drastic changes in the weather conditions and excessive heat threaten our food security as long as we have to depend on seasonal crops unavoidably.