AIDS Spread Could Hamper India's Economic Growth: UN Report

A UN Development Program (UNDP) report released today in New Delhi warned of HIV/AIDS' impact on India's economy if the epidemic is not kept in check. The report, "The Macroeconomic and Sectoral Impacts of HIV and AIDS in India," examined a 14-year period beginning in 2002.

"Economic growth could decline by 0.86 percentage points over the period and per capita gross domestic product by 0.55 percentage points," UNDP said. India's GDP could decline by 11,097 billion rupees ($237 billion US) in 2015-16 at the 2002-03 prices, while GDP per capita would drop by 7,610 rupees ($162 US), the report said.

India's individuals and government alike have increased spending on health, affecting investment and resulting in slower growth, UNDP said. Economic slowdown has also resulted from a decline in population growth, labor supply, and labor productivity of persons affected by HIV. Labor supply is likely to drop by 0.31 percent.

The report predicted that unskilled labor will be hit hardest by the spread of HIV/AIDS, with construction, chemicals, textiles, capital goods, and mining and quarrying the most vulnerable sectors.

HIV/AIDS will also have a bearing on education of children from affected families. "Children from HIV households not only have a lower rate of enrollment than those from non-HIV households, but the dropout rates are higher and school attendance lower for those who have not dropped out," the report found.

"It is time to see policy action against AIDS as a growth-enhancing policy endeavor, and, first and foremost, dedicate adequate resources for this purpose," UNDP urged.

Back to other news for July 20, 2006