What is the impact of floods on India’s GDP?

Mumbai: From Assam in the north-east to Rajasthan and Gujarat in the west, floods are taking a heavy toll on lives and property this year. As per latest reports, 82 and over 100 flood-related deaths have been recorded in the states of Assam and Gujarat, respectively.

Has flood-related damage increased in India over time? Flood-related loss of both human and cattle lives and economic damages have come down over time. However, there has been a significant change in the nature of flood-related losses in India.

Central Water Commission (CWC) gives detailed estimates of economic loss and loss of human and cattle lives due to floods from 1953-2016. From the year 2013 onwards, these are tentative figures. The 1970s was the worst decade in terms of loss human and cattle lives due to floods in India. These losses have come down since then.

Although absolute economic losses have been increasing, the relative economic damage has come down. Floods resulted in loss of 0.86% of the total GDP in the 1970s and 1980s. In the present decade, this share has come down to 0.1% of the GDP.

Until the 1970s, damage to crops was the biggest component of economic loss due to floods. Over time, damage to public utilities has acquired the biggest share in flood-related losses.

“Economic losses due to floods have been increasing, and will continue to rise if adequate preventive measures are not taken. Loss of human lives will come down as there is increased monitoring and flow of information today than ever before,” said Surya Prakash, an associate professor and head of the Hydro-Meteorology Hazard Division at the National Institute of Disaster Management. “Even states such as Gujarat and Rajasthan are now reporting flood losses because of what is called urban floods, caused due to poor drainage and infrastructure,” Prakash added.

Which state has suffered the most due to floods in the recent period? As a share of state GDP (GSDP), losses due to floods post 2011 are most grim for north-eastern states of Arunachal Pradesh, Sikkim, Assam and Meghalaya, and Himachal Pradesh in the north. These shares have been calculated by taking total losses during this period as a percentage share of total GSDP. 

Between 2011 and 2014, Arunachal Pradesh suffered an average annual loss of 10% of the GDP. The state has been reporting significant flood damages since early 2000s. Sikkim witnessed annual average losses of 1.7% of the GDP between 2011 and 2014, followed by Meghalaya, at 1.5% of the GDP during the same period. For Himachal Pradesh, annual average losses between 2011 and 2013 stood at 1.8% of the GDP. Hilly regions suffer more due to flash floods which are difficult to predict and also cause landslides.

To be sure, some experts also say that states tend to overestimate damages to garner more disaster relief funds from the Centre. 

A declining trend of flood-related loss on GDP should not make us complacent. A 2015 World Resources Institute study had shown that expanding cities and worsening climate challenges can significantly increase flood-related risks in India. Prakash echoed similar concerns while speaking to Mint.