Focus Must Shift to Recognising Potential Economic Gains of Clean Air: CSE's Anumita Roychowdhury

The evidence increasingly shows that air pollution is imposing significant economic and health costs on India. Several studies from credible institutions have estimated the scale of these losses.

For instance, a Lancet study estimated that air pollution was costing India roughly 9.5% of its GDP. The World Bank has put the figure at around 6% of GDP, while a Dalberg [a consultancy] study highlighted substantial losses to Indian businesses, estimating the costs at around 3% of GDP.

The economic impact is visible in several ways. When people fall ill, there is a significant loss of productivity. We have also seen reports of reduced consumer footfall during periods of severe pollution in Delhi. There are also concerns about people shifting their base and businesses, raising questions about operating in highly polluted locations such as Delhi.

So, the evidence increasingly suggests that pollution is under-mining economic activity. We may talk about economic growth, but if a significant part of that growth is being eroded by pollution-related health and productivity losses, the gains are not being fully realised.

At the same time, this argument can be turned around. If we are able to address pollution effectively and improve air quality, we can unlock what could be called a 'clean-air dividend’. Investments in clean mobility, cleaner industrial processes, modern waste management and pollution-control technologies can strengthen the economy, create jobs and secure livelihoods.

Effective action on pollution can reduce health and economic losses while creating new economic gains. The focus should shift from simply measuring the losses to recognising the potential economic benefits of cleaner air.

There are several important studies on this. One of the most credible is the Lancet study based on the Global Burden of Disease 2019 data. It found that air pollution was responsible for about 1.67mn deaths in India in 2019, which is nearly 18% of all deaths.

Now, from an economic pers-pective, this study estimated that lost output due to premature deaths and illness amounted to about $36.8bn, or roughly 1.36% of India’s GDP in that year. This is important because it directly captures how health impacts translate into economic losses.

While granular household-level healthcare cost data is still evolving, the macro evidence is very clear: increased hospital admissions, especially during high pollution episodes. And growing demand for health-care infrastructure. All of this ultimately translates into higher out-of-pocket expenditure for households, which is a key concern.

The combination of evidence, from mortality, morbidity and system-level costs, shows that pollution is already imposing a significant financial burden.

GRAP is essentially an emergency-response mechanism. It is designed for situations when pollution levels become severe, especially during winter, when pollutants get trapped due to adverse atmospheric conditions. The idea is simple: when pollution is already very high, you take temporary measures to prevent any further loading. That is why actions like stopping construction, restricting truck entry and curbing certain industrial activities are implemented.

But these measures come with significant economic costs. It is not just a cost to industry, it also affects labour. Daily wage workers and informal sector workers often see their livelihoods disrupted, and their earnings decline. Businesses face reduced activity and consumer footfall also drops. So, there is clearly an economic fallout from these emergency measures.

At the same time, it becomes a kind of 'chicken-and-egg' situation. When pollution reaches such extreme levels, you cannot afford to do nothing. Some intervention becomes necessary to prevent further deterioration. The real issue, however, is that GRAP is only a reactive, short-term response. The only sustainable way forward is to move beyond this constant reliance on emergency measures.

Delhi already has multiple clean air action plans in place. The focus now needs to shift towards systemic, year-round interventions—improving infrastructure, strengthening implementation and reducing emissions consistently so that such extreme situations do not arise.

Instead of focusing primarily on GRAP, we need to prioritise long-term structural changes. These include clean-energy transitions, cleaner transport systems, better waste management and stricter industrial-emission controls, implemented consistently throughout the year.

Only then can we reduce both pollution levels and the recurring economic disruptions that come with these emergency responses.

And this transition has to happen across sectors—industry, transport and waste management—so that we are genuinely moving towards a low- or zero-emission paradigm. That also means accelerating the clean-energy transition and ensuring that all these elements work together in a coordinated way.

Now, to make this happen, the key requirement is scaled-up action—both across sectors and across geography. You cannot expect meaningful results if efforts remain limited or fragmented. For instance, you may push the Delhi government to take strong action, but Delhi cannot become a 'green island' if the larger Indo-Gangetic Plain continues to remain heavily polluted.

So, pollution is a regional problem, and it requires a regional response. What matters now is the scale and the speed of action. Incremental or isolated measures will not be enough. Only a coordinated, large-scale and fast-paced transition across sectors and regions can effectively address the problem.