Why India's poor air quality is taking a toll on its economy

Saurabh Jain, who runs an IT company in Delhi, dreads the winter season when a thick smog usually blankets the town. The smog isn't just a way to obtain physical discomfort for him but also influences his business.

“A lack of oxygen is a drag on employee productivity,” Mr Jain, the founder of Thinvent Technologies, says.

A number of the knock-on ramifications of such high polluting of the environment levels include “productivity loss because of frequent illness of our employees", he says. "Foreign customers and vendors usually do not want to go to us as a result of their awareness about the Delhi air situation”. Mr Jain also offers to invest in electronic home air cleaners to withstand the season.

Toxic air in Asia's third major economy is now turning out to be a health hazard for many companies and has a substantial effect on its economy. The World Bank estimates that India's air pollution costs the country around 8.5 per cent of its gross domestic product.

The Delhi region - home to its capital city - has one of the worst air pollution levels in the world, which in recent weeks has hit a lot more than ten times the safe limits set by the World Health Organisation. The deterioration in quality of air is mainly because of farmers burning the “stubble” of their crops, snarling traffic in cities and professional fumes. These emissions further stagnate because of the cooler weather, making the winter season unbearable sometimes.

The issue has become so extreme that the Indian government announced a fresh law in October to tackle polluting of the environment in the Delhi National Capital Region. Beneath the legislation, a newly formed 20-member commission will oversee and enforce measures to increase the region's air quality. The commission could have the power to set particular parameters for quality of air and emissions, and inspect premises and even order the closure of plants that usually do not comply. The law also allows for jail sentences as high as five years for violators.

But the problem isn't limited by Delhi. India houses ten of the world's 15 most polluted cities, according to IQAir, the world's major real-time quality of air information platform.

“Air pollution includes a deep impact on the economy,” says Divakar Vijayasarathy, the founder and managing partner of DVS Advisors, a specialist services firm. “Given the effect on the economy, this also has an obvious effect on the investment climate.”

This year, polluting of the environment has turned into a serious concern for India after several studies revealed it could lead to more serious Covid-19 infections and an increased death rate from the virus.

With an increase of than 8.1 million confirmed Covid-19 cases, India may be the second worst-affected country behind the US, according to official data from the country's health ministry.

With Delhi's new law, “the federal government has been forced to take radical measures” after pursuing more piecemeal steps which may have “proved to be too little and too late because of the extent of the problem accessible”, Mr Vijayasarathy says.

Other solutions to tackle the poor quality of air recently have included trying out odd-even number plate schemes to restrict when vehicles can travel on the roads, water sprinkling, monitoring crop stubble burning, and a good short-term ban on the sale of fireworks for Diwali.

But while experts agree that tough action is needed to tackle the problem, there are questions about how exactly effective Delhi's new law will be.

“That is a welcome step by the federal government,” says Vikram Thaploo, the chief operating officer at Apollo Telehealth. “However Personally i think that adding new laws would only conclude creating more friction and confusion. There are presently enough laws in force that have the ability to deal with the problem - however the only thing that's lacking is their proper implementation.”

“A consolidated political will to manage this critical issue at all levels,” he says.

Many companies in India also recognise they have a crucial role to play in improving air quality.

Stuti Gawri, the chief executive of The Greyy Room, an inside design firm located in Delhi, says that her firm is focusing on using low VOC paints and more greenery in its projects to greatly help improve the air quality.

“Air pollution is merely bad for business and just like all other entities, we have been influenced too,” says Ms Gawri. “It strains employee productivity, increases sick leaves, subsequently escalating health costs and delaying in conditions of meeting deadlines and timelines. This decreases business growth and expansion.”

Mr Jain at Thinvent Technologies says that his company can be striving to lessen its emissions amid his frustration with the impact of polluting of the environment on his business.

“We inspire employees to take public transport and we're are also very judicious inside our electricity consumption,” he says.

The renewed give attention to addressing Delhi's toxic air comes as India is under pressure to meet up the targets of the Paris climate accord.

Campaigners have always been sounding the alarm on the impact of polluting of the environment.

“Air pollution is a threat to your health and our economies,” said Minwoo Son, a clean air campaigner at Greenpeace East Asia, in a written report issued earlier this season on the global cost of polluting of the environment from fossil fuels, which is estimated at $2.9 trillion. It said that India bears the 3rd highest costs from fossil fuel polluting of the environment after China and the united states. The report also estimated that about 490 million days of work are lost in India because of illnesses resulting from contact with air pollution.

“But that is a problem that we know how to solve, by transitioning to renewable energy sources, phasing out diesel and petrol cars, and building public transport,” Mr Son says.

Within India's longer-term efforts to tackle the problem of air pollution - and also motivated by a have to reduce its reliance on costly fossil fuel imports - the government is promoting the utilization of renewable energy. Prime minister Narendra Modi is pledged to generate 175GW of energy from renewable sources by 2022.

In September, in a statement issued at a virtual conference, Mr Modi said he was confident that India would surpass this target. “We've scaled up our non-fossil fuel-based generation to 134 GW, which is about 35 % of our total power generation. We are confident of increasing it to 220 GW by 2022.”

Analysts concur that India is making progress when it comes to adopting renewable energy.

“The government’s thrust on solar and other cleaner sources is definitely paying down,” says Mr Vijayasarathy.

The country in addition has set an ambitious target of 30 per cent of the vehicles on its roads being electric by 2030.

But with India's expanding middle class, increased urbanisation and professional activity, urban planners describe that cities such as for example Delhi must adapt rapidly to bring polluting of the environment under control.

“The ever-increasing urban population needs replacement of obsolete infrastructure, transport plans and new implementation methods, and also increased receptivity to the regulation of private vehicles,” says Prabhakar Kumar, the assistant vice president and head of department, urban planning at REPL, a Mumbai-based urban development and infrastructure consultancy.

As India also builds new developments, including “smart cities”, he says that masterplans have to element in “sufficient green belts, green building designs, efficient public transport systems, walk-to-work concepts, and robust systems for solid waste management” to regulate air pollution.

The issue of India's polluting of the environment may be gaining renewed attention and more efforts are being made at a government level, but a massive amount of work is still necessary to address a problem that's hampering the economy and claiming lives, experts say.

“There’s without doubt that India’s polluting of the environment crisis is going for a huge toll on public health and economical growth,” says Mr Thaploo.