Our Bureau

New Delhi, July 20

In the absence of remedial policy action, the potential cost to the economy arising from high growth rate of HIV and AIDS could pull down the economic growth, according a study done by the National Council of Applied Economic Research (NCAER) and supported by the National AIDS Control Organisation , along with the United Nations Development Programme .

The study said that while economic growth could decline by 0.86 percentage points over the next 10-15 years, per capita gross domestic product could decline by 0.55 percentage points. According to the model projections, GDP at 2002-03 prices would decline in 2015-16 by Rs 11,097,93 crore.

The report suggested five routes through which the economy could be affected. Amongst the five routes were slower growth in population and supply of labour due to AIDS related deaths. The study estimated labour supplies to drop by 0.31 per cent by 2015-16. The growth of the economy could get further affected by a 5 per cent increase on health spending in overall government expenditure and lower labour productivity.Apart from economic growth being hit by the rapid increase in HIV AIDS cases, other important issues were also pointed out in the study. According to it, not only did children from HIV households have lower enrolment rates in schools, the dropout rates were also much higher. It also pointed out that HIV households had to either liquidate their assets or borrow heavily to finance treatment as the disease advanced. According to the study, people affected by the disease did not enjoy the benefits of being covered by a health insurance policy.The study also recommended the strengthening of the legal status of women, since women and children were the worst affected by the disease.

(This article was published in the Business Line print edition dated July 21, 2006)
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