Relevance for UPSC: GS III (Disaster Management, Climate Change, Economy); Source: OECD Development Centre, The Hindu

Context

According to the OECD Development Centre (2025), India loses about 0.4 percent of its GDP annually due to natural disasters, underlining disasters as a recurring macroeconomic risk, not one-off shocks.

Key Facts 

• Emerging Asia faces ~100 disasters each year, affecting ~80 million people.
  
• In India, losses are dominated by floods, storms, and heatwaves.
  
• Disaster damages have risen sharply since 2000, reflecting climate extremes.
  
• India ranks among the highest disaster-risk countries in Asia due to high exposure and vulnerability.
  

Policy Significance

• Shifts focus from post-disaster relief to risk reduction and resilience financing.
  
• Calls for climate-resilient infrastructure, early warning systems, insurance, and fiscal risk integration.
  

Natural disasters are becoming a structural drag on growth. India’s development trajectory depends on preparedness, adaptation, and disaster-risk financing.

Q. Which statement best reflects the current impact of natural disasters on India?
A. They are episodic and fiscally negligible
B. They mainly cause social, not economic, losses
C. They impose a recurring macroeconomic cost
D. They are declining due to better response systems

Correct Answer: C