Researchers from Indian Institute of Management Report New Studies and Findings in the Area of Risk Management (Nexus of Drought, Relief Finances, and Economic Growth: Evidence From Indian States): Risk Management

2024 NOV 05 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators discuss new findings in Risk Management. According to news reporting out of Bihar, India, by NewsRx editors, the research stated, “Droughts significantly affect India’s agricultural sector and overall economic growth in dry, arid, and semi-arid regions. Around 50% of crop areas depend on the south-west monsoon, making them vulnerable to deficient rainfall.”

Our news journalists obtained a quote from the research from the Indian Institute of Management, “Droughts redirect financial resources to relief efforts, impacting other sectors negatively. This study examines the relationship between droughts, relief finances, economic growth, and agricultural sector growth across 28 Indian states from 1991-92 to 2015-16. Findings show that droughts reduce state agricultural gross domestic product growth by approximately 1.53%, 17.67%, and 13.93% across all states, least irrigated states, and moderately irrigated states, respectively. The impact on overall economic growth is influenced by the availability of infrastructure, such as irrigation and is negatively but not significantly affected, as drought effects are localized. However, postdrought relief finances have a significant positive impact on moderately and least irrigated states, underscoring the need for appropriate drought risk management policies in these areas. This study critically examines the repercussions of droughts on India’s agricultural sector and overall economy across 28 states from 1991-92 to 2015-16. The findings underscore a substantial reduction in state agricultural gross domestic product (SAGDP) growth due to the adverse effects of droughts. The impacts vary across states, with differing degrees of severity observed. Importantly, the study sheds light on the localized nature of overall economic growth effects, contingent upon the presence and efficiency of irrigation infrastructure. Droughts necessitate the redirection of financial resources to relief efforts, consequently impacting sectors beyond agriculture. However, a noteworthy positive trend emerges postdrought, where relief finances showcase a significant impact, particularly in states with limited irrigation facilities. Practitioners and policymakers are strongly urged to prioritize targeted interventions and resource allocation, especially in regions lacking robust irrigation infrastructure. The research underscores the critical importance of proactive drought risk management policies, emphasizing the positive role that relief finances play in mitigating the economic consequences of droughts.”

According to the news editors, the research concluded: “Implementation of these practical insights holds the potential to fortify India’s resilience to droughts, safeguarding both the agricultural sector and overall economic stability, thereby contributing to sustainable and adaptive policy frameworks for the nation’s prosperity.”

This research has been peer-reviewed.

For more information on this research see: Nexus of Drought, Relief Finances, and Economic Growth: Evidence From Indian States. Natural Hazards Review, 2024;25(4). Natural Hazards Review can be contacted at: Asce-amer Soc Civil Engineers, 1801 Alexander Bell Dr, Reston, VA 20191-4400, USA. (American Society of Civil Engineers - www.asce.org; Natural Hazards Review - http://ascelibrary.org/nho)

Our news journalists report that additional information may be obtained by contacting Ashish Sharma, Indian Institute of Management Bodh Gaya, Finance & Accounting, Turi Khurd 824234, Bihar, India.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1061/NHREFO.NHENG-1984. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

(Our reports deliver fact-based news of research and discoveries from around the world.)