ExplainSpeaking: The economic cost of being ‘filthy India’

One, how “filthy” are we per se and also when compared to other countries? I am presuming here that regardless of how hurtful it sounds, not many would argue that we have a long way to go before we call ourselves a clean country.

Two, what does it cost us as an economy to be this filthy? Because, frankly, if being filthy and polluted doesn’t cost us then that would be a great “economic” argument in favour of staying filthy.

But before we take a stab at answering these questions, let us first look at the other big analytical news on the economic front. This had to do with how the members of the newly constitutedMonetary Policy Committee(MPC) of the Reserve Bank of India (RBI) saw the state of the Indian economy.

The week started with news reports of RBI Governor Shaktikanta Das stating that “India at the doorstepof economic revival”. But the week ended with news of Das contracting Covid-19and the release of MPC’s minutes from the October policy review that presented a far more sobering outlook for the economic recovery.

The most noteworthy, and easily the most accessible, assessment was that of Michael Patra.

He stated that “it may take years” for India to regain the output (read GDP) lost as a result of the pandemic. And at a time when many commentators, especially in the government, have chosen to stress on the so-called green shoots, Patra stated: “While this has raised optimism about the much-awaited recovery, perhaps, pragmatic caution is warranted”.

His reason: “The fear of a second wave looms over India; already it has forced lockdowns across Europe, Israel and Indonesia, and India, with the second-highest caseload of infections and over-stretched healthcare infrastructure, cannot be immune. In the absence of intrinsic drivers, the recovery may last only until pent-up demand has been satiated and replenishment of inventories has been completed. Empirical evidence suggests that consumption-led recoveries are shallow and short-lived”.

Coming back to Donald Trump’s reference to “filthy India”, it must be remembered that while he was talking with reference to the Paris Climate Accord, the attempt here is to look at the filth in terms of poor or inadequate sanitation and rising pollution levels.

According to the website “Our World in Data”, part of Oxford University, “an estimated 775,000 people died prematurely as a result of poor sanitation in 2017. “This was 1.4% of global deaths. In low-income countries, it accounts for 5% of deaths,” it states.

See the chart below to get a handle on the annual number of deaths by risk factors in India. “Air pollution” — both indoors and outdoors — as well as “poor sanitation, unsafe water sources, and no access to hand washing facilities” compete with risks due to high blood pressure, high blood sugar and smoking.

 The annual number of deaths by risk factors in IndiaThe chart below shows how the share of deaths due to unsafe sanitation has changed over the years. In India, this share has been higher than its neighbours such as Bangladesh and Pakistan.

 Share of deaths due to unsafe sanitationFurther, while the share has been falling in India yet the pace has slowed down a bit since 2015. Of course, this data is only until 2017 and is the latest available according to the Global Disease Burden study — published in Lancet — by the Institute for Health Metrics and Evaluation (IHME).

The reason why so many die from unsafe sanitation is that, in India, a high proportion of the population does not have access to “improved sanitation”. Improved sanitation is defined as facilities that “ensure hygienic separation of human excreta from human contact”. This includes facilities such as flush/pour flush (to piped sewer system, septic tank, pit latrine), ventilated improved pit (VIP) latrine, pit latrine with slab, and a composting toilet.

In 2015, 68% of the world population had access to improved sanitation facilities. In other words, almost one-third of people did not have access.’

In India, only 40% of the population had access to improved sanitation. This is much lower than its next-door neighbours such as Sri Lanka (95%) and Pakistan and Bangladesh (both over 60%). At 40% access, India is clubbed with countries such as Zimbabwe and Kenya, and is below countries such as Zambia and Senegal.

While the broader trend is that access to improved sanitation increases with higher levels of income, Pakistan, Bangladesh, Rwanda and Nepal have achieved better access at lower levels of per capita GDP than India (see chart below). Further, at roughly India’s level of per capita GDP, Uzbekistan has 100% access, while Vietnam and Myanmar have double the levels of access to improved sanitation.

 Share of population with improved sanitation vs. GDP per capita, 2015Overall, poor sanitation and pollution have significant adverse impacts on public health standards. Child stunting — which means having a lower height for one’s age— is a sign of chronic malnutrition and data shows that stunting is higher in countries (such as India) where access to improved sanitation is low (see chart below).

 Prevalence of stunting vs. improved sanitation facilities, 2015All this brings us to the cost of being filthy. According to the World Bank: “A lack of sanitation also holds back economic growth. Poor sanitation costs billions to some countries”.

In India’s case, the most oft-quoted study is a World Bank one from 2006 when such costs were pegged at $53.8 billion or 6.4% of India’s annual GDP. Even if this percentage (of GDP) has stayed the same, at current-day GDP, the losses (a rough approximation) would be close to $170 billion (or Rs 12 lakh crore).

“The economic losses are mainly driven by premature deaths, the cost of health care treatment, lost time and productivity seeking treatment, and lost time and productivity finding access to sanitation facilities,” according to the World Bank.

According to the World Health Organization, “every dollar spent on sanitation yields about $9 in savings on treatment, health-care costs and gains from more productive days”.

Clearly, it doesn’t pay for countries such as India to stay filthy, regardless of what the more prosperous countries such as the US say or do.

So, stay clean and stay safe.

Courtesy The Indian Express