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The scorching summer temperatures sweeping across India this year, with an average of 40 degrees Celsius, are not only taking a toll on farmers but are also poised to have a substantial impact on the overall economy.
While some eastern cities have been spared, many parts of the country are experiencing severe heatwaves, prompting people to avoid going out during the hottest hours of the day. Although this is not a cropping season, the impact of the heatwave is being felt on seasonal and perennial crops like vegetables as well as livestock. The severity of heatwaves is escalating every year, raising concerns about a looming climate crisis. Regulators and financial institutions have been emphasizing the detrimental effects of heatwave on the economy. In May last year, the Reserve Bank of India's (RBI) Department of Economic and Policy Research had warned that climate change, driven by rising temperatures and shifting monsoon patterns will have a significant impact on the economy. RBI mentioned, "India, along with countries such as Brazil and Mexico, face high risk of reduction in economic growth, if global warming raises the temperature by 2 degree Celsius as against 1.5 degree Celsius (IPCC, 2018). Climate change manifested through rising temperature and changing patterns of monsoon rainfall in India could cost the economy 2.8 per cent of its GDP and depress the living standards of nearly half of its population by 2050." The report also highlighted the risk of substantial job losses due to excessive heatwaves, "India could account for 34 million of the projected 80 million global job losses from heat stress associated productivity decline by 2030 (World Bank, 2022). Further, up to 4.5 per cent of India's GDP could be at risk by 2030 owing to lost labour hours from extreme heat and humidity conditions", stated RBI. Moreover, the Bank of Baroda's economic research report underscored how heatwave conditions are affecting food production in India. Despite a predicted normal monsoon by the Indian Meteorological Department (IMD), concerns remain about inflation, especially in vegetable prices. Barclays' report echoed these concerns, emphasizing that heatwave conditions are impacting electricity demand and contributing to vegetable inflation. The global implications of heatwaves and climate change were also highlighted in a recent report by the World Economic Forum, which predicted 14.5 million deaths and USD 12.5 trillion in economic losses due to the climate crisis. Shyam Bishen, Head of the Centre for Health and Healthcare at the World Economic Forum, emphasized the profound impact of rising temperatures on human health and the global healthcare system. Shyam Bishen said, "While there has been much discussion about the impact of climate change on nature and the global economy, some of the most pressing consequences of the Earth's rising temperatures will be on human health and the global healthcare system." In India, there has been a surge in demand for air conditioners, air coolers, and refrigerators. Dealers say sales are expected to go up by 30-40 percent this year, with many products already out of stock in several areas. To mitigate the effects of the heatwave, many states and municipal bodies have issued guidelines advising people to stay indoors during the hottest part of the day and remain hydrated. (ANI)
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