HIV Could Erode India’s Economy Over Next Decade, Report Says
The spread of HIV/AIDS in India could cause the country's economic growth to fall by 0.86 percentage points annually over the next decade, according to a report released Thursday by the National Council of Applied Economic Research, Reuters AlertNet reports (Zaheer, Reuters AlertNet, 7/20). The report, which was commissioned by the U.N. Development Program, also finds that per capita gross domestic product could fall by about 0.56 percentage points over the next 10 years because of the disease (Economic Times, 7/21). UNAIDS and India's National AIDS Control Organization also supported the study, which covers the period from April 2002 to March 2016 (Reuters AlertNet, 7/20). HIV/AIDS will impact India's economic growth -- currently at 8% -- because more money will have to be spent on health care, the report says (George, AP/BusinessWeek, 7/20). It also finds that the country's labor supply likely will decline by 0.31%, with unskilled labor most affected. In addition, the report says that government savings as a percentage of GDP are likely to drop by 0.67%, and household savings and investment will decrease by 1.15% and 1.16%, respectively. HIV/AIDS also could erode the industries of construction, chemicals, mining and quarrying, capital goods and textiles, the report says. The disease likely will reduce the number of people with access to education because children who have family members living with HIV/AIDS have lower rates of school enrollment and attendance and are more likely to drop out, according to the study (AFP/Yahoo! News, 7/20). HIV/AIDS also is likely to erode India's outsourcing industry, Suman Bery, director general of NCAER, said. The economic impact of HIV/AIDS will be most severe from 2012 to 2016 -- the last four years the report covers -- which could see a reduction in economic growth of 1.5% annually, according to the report (Wonacott, Wall Street Journal, 7/21).
Reaction, Next Steps
C. Rangarajan, who chairs Prime Minister Manmohan Singh's Economic Advisory Council, disagreed with the report's findings that HIV/AIDS could reduce economic growth by almost 1% annually. He said that India's economy was growing even with the prevalence of diseases such as tuberculosis. "If we add all our diseases (according to the NCAER model), we will hardly have any growth rate," Rangarajan said. UNAIDS estimates that there are 5.7 million HIV-positive people living in India (Reuters AlertNet, 7/20). According to the report, the number of HIV-positive people in the country could increase to between 20 million and 25 million by 2010 (Wall Street Journal, 7/21). The report recommends that India take increased measure to combat HIV/AIDS, which could enable the economy to grow by 1% (Gentleman, New York Times, 7/21). "The government of India's scaled-up response in financing and energy will halt and reverse the trend the epidemic has shown over the next four or five years," Ruben del Prado of UNAIDS said (BBC News, 7/20). The report was the first to assess the impact of HIV/AIDS on India's economy (Wall Street Journal, 7/21). It surveyed six states in the southern and eastern parts of the country and more than 8,000 households (AFP/Yahoo! News, 7/20).