By Abhinav Gupta,
India is experiencing a severe air pollution challenge. India is now ranked as the fifth most polluted nation in the world. It is home to 21 of the top 30 most polluted cities across the globe. The National Clean Air Programme was started, and the government had set a goal to reduce PM2.5 pollution by 20-30% by 2024. However, the discussion on air pollution in India and around the world has so far focussed on its effects on public health.
An aspect of air pollution is that it impacts a country’s economy. Every year, air pollution costs Indian businesses around 7 lakh crore (USD 95 billion), or 40% of what it would cost to combat COVID-19 annually. This is the same as 3% of the GDP of India. In research published in The Lancet, it was noted that the national capital had the highest per-capita economic loss due to air pollution. Although these expenses may have gone unnoticed to date, it is increasing day by day.
There are direct ways in which air pollution can affect GDP like
● early mortality
● increased health care costs
● welfare lossesBut there are also indirect losses that contribute to GDP losses like
● reduced labor or employee productivity
● decreased consumer spending
Out of these, employee productivity, customer traffic, and premature mortality have an immediate influence on the organization.
Impact on employee productivity
Air pollution costs Indian employers almost USD 6 billion annually, or to put it differently, 1.3 billion working days. On days when air pollution reaches harmful levels, employers can notice a net attendance decline of 10%.
This is prompted by a variety of factors, such as transient health issues and employees’ obligations to look after the elderly and youngsters out of school. The distribution of absenteeism’s effects is not uniform among population groups, despite the fact that the causes of it are generally consistent.
Sectors with more physically demanding jobs tend to have higher absentee rates since these workers are more susceptible to long-term health impacts. Nearly a third of the manufacturing jobs in India are in the fields of construction and food processing, which both employ a sizable number of people.
Impact on consumer footfall
Labour and employee productivity is not the only thing that gets impacted due to pollution. Consumer footfall gets reduced almost by 1.3 percent due to air pollution, silently eroding the nation’s consumer economy and costing Indian businesses up to USD 22 billion in lost revenue.
As customers lessen outdoor activities to reduce exposure to pollution, they spend less. During the more polluted winter months, the decline is three times in consumer footfall. These were the peak months wherein the air pollution levels were at their highest – January, November, and December. This thus resembles the impact of Covid-19 where industries that cater to the consumers suffer.
Premature mortality costing the Indian economy
As per a report, In India, air pollution accounts for 18% of all fatalities on average. This is approximately 3.8 million workdays lost. A total of 1.7 million deaths in India in 2019 were attributed to air pollution, costing the country USD 45 billion. The percentage has increased over the years. This has severe effects on labour productivity for firms because it shortens people’s productive working life. Employment in outside jobs (such as construction workers) and highly polluted inside surroundings also have an impact on health and mortality. Moreover, infant fatalities under one year of age account for 34% of the financial losses.
There is a way out though. It has been seen in the United States that every dollar invested since the 1970s is said to have yielded an economic benefit of USD 30. Their economic growth is a testament to the benefits of investing in air pollution control strategies. There is a need for sufficient and long-term investments in air pollution control and mitigation strategies by central and state governments to ensure it pays back in the long run.
(The author is CEO, and co-founder at ActiveBuildings. Views expressed are personal and do not reflect the official position or policy of FinancialExpress.com.)