Global Policy Forum

By Randeep Ramesh

The HIV virus could cause huge damage to the fast-growing Indian economy, opening a 11,000bn rupee (£140bn) hole in the nation's balance sheet, says a UN report released today.

The study, commissioned by the UN Development Programme, paints a bleak future if the virus is left unchecked. By 2016, it projects that more than 16 million people will be infected, with economic growth slowing by almost a percentage point a year. After China, India is the fastest-growing major economy in the world.

The paper's author, Prasanta Pradhan of Delhi's National Council of Applied Economic Research, said extra government health spending and the increased medical bills of HIV households would lead to a fall in national savings. This would mean less money for investment and hence a draining away of economic growth.

The report also makes clear that Aids could severely reduce the labour force, with tourism, construction, textiles and mining industries most at risk. India has the most people living with the HIV virus; some 5.7 million, overtaking this year South Africa, which has 5.5 million. India's overall rate of adult infections pale compared to South Africa's, however, because of the relative size of the population in both countries.

The UN model cites Africa's experience of the past decade, where widespread migrant labour, prostitution and a stigma about sexually transmitted diseases caused an explosion in Aids cases. In envisaging a "South African trajectory" for India, the authors of the report say that within a decade, the rate of infections could affect 2.8% of India's adults.

But Indian officials claimed the projections were wrong. "We calculate the maximum number of infections at 6.5 million people in the next five years. I cannot see how it can go beyond that," said Sujatha Rao, the director-general of India's National Aids Control Organisation.

Ms Rao said there were many infectious diseases in India and, "left alone", each could seriously affect growth. "We already have measures in place to halt the spread [of the HIV virus] which this study does not take into account."

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