Smog Effects Economy Along with Health: Sunil Kumar Sinha

Smog, which for long is considered as a health and environment hazard, is quickly taking a toll on economic activities as well.

Planet Outlook
November 13, 2020
Smog Effects Economy Along with Health: Sunil Kumar Sinha

Smog, which for long is considered as a health and environment hazard, is quickly taking a toll on economic activities as well.

Industry experts contend that if unchecked, the issue of smog will assume a larger role in hampering economic activities in and around north India, especially Delhi-NCR.

Among sectors, tourism, construction, aviation, insurance and real estate prices will be heavily dented due to this winter phenomena.

Besides economic disruption, the aspect of reputational damage associated with health risks also exists in Delhi-NCR.

"Smog does impact economic activity, but its intensity is very low as a disruptor. However, if left unchecked, it will definitely have a greater impact in the future," Sunil Kumar Sinha, Principal Economist, India Ratings & Research, told IANS.

"There is also a reputational risk involved with smog and this impacts tourism and other travel related factors, when one considers to visit any place," he added.

Given that most of these trends are witnessed year after year, this time around, the Covid-19 pandemic has accelerated some of the downside risks.

"Environment externalities are expected to have a negative impact on growth," said Madhavi Arora, Lead Economist for Edelweiss Securities.

"That is one of the reasons why the international community is so much focused on climate and environmental issues," Arora added.

As a case-in-point, travel app ixigo last year shared that bookings and travel searches for New Delhi from key international destinations, including Singapore, Thailand and Qatar, had fallen by 44 per cent owing to the deteriorating air quality.

"Tourists, including foreigners, had a tough time last year coping up with increasing air pollution in Delhi. With air quality dipping to 'severe' category every year around Diwali, there is a growing health concern, especially for the children and senior citizens who are visiting or residing in the national capital," said Rajnish Kumar, Co-founder and CTO, ixigo.

In 2020, when the pandemic has crippled international travel, Kumar said: "We are witnessing a trend of 'escape tourism' this year owing to an increasing level of pollution in metros like Delhi. Current AQI in the city is double of what it was last Diwali when the AQI peaked to 235. This has led to a spurt in outbound travel from Delhi to pollution free destinations like Goa, Uttarakhand and Himachal Pradesh."

"We have seen a 35 per cent month-on-month increase in bookings for Goa from Delhi in October. Low airfares this year around Diwali are further encouraging the travellers to plan green getaways in search of fresh air," he added.

According to Skymet's Chief Executive Yogesh Patil: "It is another type of lockdown when people avoid going outside or even visiting Delhi-NCR for these months just to be safe from smog. The health cost for some people might come out to be as high as their other economic expenditure, so it does have an economic cost.

"However, pollution concerns have not gained the sort of prominence in India that they should have, but fortunately programmes are being started for plantations in urban areas. The pandemic too has triggered people's consciousness regarding the need for a safe and clean environment."

The restrictions to curb pollution and smog also delay construction projects.

As per Anarock's latest research, the average completion time for both small and large residential projects is the highest in Delhi-NCR among all cities for projects launched and completed between 2010 and 2020.

"Periodic construction bans by both NGT and the apex court due to rising pollution levels almost every year is certainly a major deterrent for the real estate sector in Delhi-NCR, which inevitably impacts project deliveries," said Anuj Puri, Chairman, Anarock Property Consultants.

"On an average, a one-month ban on all construction activities delays a project by at least 3-4 months," Puri added.

The seasonal phenomenon occurs in Delhi-NCR during the onset of the winter season every year. The time period coincides with agricultural stubble burning in nearby states.


(Rohit Vaid can be contacted at