Air pollution costs Indian businesses ₹7 lakh crore annually: Report

Air pollution costs Indian businesses ₹7 lakh crore ($95 billion), or an equivalent to 3% of India’s GDP, annually, according to a report by consulting firm Dalberg Advisors in partnership with Clean Air Fund and the Confederation of Indian Industry (CII). The costs manifest in six ways.

The pollution ends up lowering labour productivity and consumer footfall. It leads to premature mortality, lowers asset productivity as well as increases health expenses and welfare losses, according to the report. Out of these, employee productivity, consumer footfall and premature mortality impact businesses directly.

According to Dalberg’s estimates, workers take 1.3 billion days off work annually because of the effects of air pollution on their health, amounting to $6 billion in lost revenue. Air pollution has also been shown to have significant effects on workers’ cognitive and physical performance, lowering their on-the-job productivity and thereby decreasing business revenue by up to $24 billion.

The report said lower air quality also reduces consumers’ willingness to venture out of their homes, leading to lower footfall and $22 billion less revenue. All estimates are based on data from 2019.

The report is based on a quantitative analysis of four pathways through which pollution decreases profitability.