A recent study by three premier institutions predicted that a continued unchecked spread of HIV/AIDS epidemic can adversely impact macro-economic parameters including growth rate, educational levels, and labor shortages. The National Council of Applied Economic Research (NCAER), the National AIDS Control Organization (NACO), and the United Nations Development Program (UNDP) released a Macroeconomic and Sectoral Impacts report using Computable General Equilibrium analytical techniques.
The purpose of the study is to study the likely impact of the epidemic from 2002 to 2016 on the economic growth of the nation. The model showed that “Economic growth could decline by 0.86 percentage points over the period and per capita gross domestic product (GDP) by 0.55 percentage points.” Based on assumptions that failure to check the epidemic will lead to increased Government’s social support and an increase in household health spending leading to reduced savings and making monies available for investment more expensive. The savings rate as a percentage of the Gross Domestic Product (GDP) will fall by .67%, household savings by 1.15%, and investments by 1.16%. The value of this decline in 16 will be Rs.11, 097, 93 billion (USD 241 billion).
Unchecked epidemic will cause a shortage of skilled and unskilled labor whose numbers will decline by .35% and .22% respectively resulting in a Sectoral loss of productivity. With loss of productivity, real wage rates for unskilled labor is likely to fall by .07 points leading to associated health issues like malnutrition and the Government will be unable to do anything as its health related social spending would have increased by 15% by 2016.
While the HIV infections as a percentage of the large population may be low, the study warns that the micro-level impact on households can be very severe. Moreover, the unexplored impact on consumption and savings may have a broader impact than what this model predicts.
Another aspect of this study is to understand the impact of the epidemic on social system. In a different report called the “Socio-Economic Impact of HIV and AIDS in India,” the organizations interviewed infected and non-infected people to find that the dropout levels is higher and attendance level is lower in the children of the young parents in “prime working age” with girl child more likely to be pulled out of school. Most children from HIV households dropped out to provide care to the sick or younger siblings, assist in household chores, or in extreme cases seek employment. Respondents of the survey said that the children are “not interested in studies” and the parents considered education “unnecessary." While this was the stated reasons, the study found that often families were forced by circumstances beyond their control to abandon education for their children. Children from HIV households also suffered from low attendance citing “parent unwell,” “fees not paid,” “had to look after younger siblings,” or “attend to household chores” as reasons.
More children from HIV households went to Government schools (63%) than from non-HIV households (55%). The study says the reason was that the family had to find ways to cut expenses.
This extensive study surveyed 2068 HIV households and 6224 non-HIV households in
Nagaland. It also interviewed 2,386 people living with HIV and AIDS.