India: Economy Shaken by Quake

Publisher Name: 
Inter Press Service

NEW DELHI -- As the world rushes to help India tackle
the aftermath of the country's most disastrous earthquake, the
government has begun calculating the social and economic costs of
the tragedy.

According to a top government leader, the Jan. 26 quake, which
rated 7.9 on the Richter scale, destroyed property worth more than
100 billion rupees (about two billion U.S. dollars) in western
coastal Gujarat state.

''We are still assessing the damage,'' Home Minister L.K.
Advani said during a tour of the quake-hit region, when he told
reporters that the economic losses amounted to 100 billion rupees.

However, earlier estimates by Indian business and industry
chambers put the economic loss at more than twice this, with daily
industrial production losses estimated to be up to 20 billion

''It is impossible to estimate how many people have been
killed,'' the minister, who is the second most powerful government
leader, was quoted as saying.

Varying estimates of the human toll have been made, with Defence
Minister George Fernandes claiming that some 100,000 people could
have been killed. But the Gujarat provinical government puts the
death toll at between 20,000 to 25,000.

Few, however, dispute that the economic impact of the quake will
be felt far beyond the state and will tell on the federal
government's finances.

''Any disruption to the growth of Gujarat would naturally have
an impact on the rest of the country,'' said India's usually
optimistic Finance Minister Yashwant Sinha.

Gujarat is India's second most industrialised state and the hub
of the country's petroleum industry. It is home to the private
Reliance Industries, which runs India's biggest refinery. The
government's Oil and Natural Gas Commission has major operations
in the state.

Most of India's crude import comes to the Arabian Sea port of
Kandla in the state, which has also been severely damaged, with
most workers dead.

''Gujarat is one of India's most industrialised States, so the
destruction there will naturally cause tremors in the rest of the
economy,'' noted the national daily, 'The Hindu'.

''Still, with only two months to go before the end of the
financial year, the earthquake is unlikely to have an impact on
the growth of either the national GDP (gross domestic product) or
the central government's finances in 2000-01,'' the daily added.

But economy analysts say the full financial costs of the quake
will be felt in the coming financial year, which starts Apr. 1.

The immediate reconstruction priority is to rebuild basic
services -- housing, roads, drinking water supply, health care,

Though the large industrial complexes in the state survived the
quake, extensive damage has been caused to small-scale industrial
units, according to reports.

The Indian government has asked the World Bank and the Asian
Development Bank for urgent loans worth 1.5 billion dollars to
support reconstruction and rehabilitation in Gujarat. The World
Bank has announced an immediate release of 300 million dollars and
promised a bigger reconstruction loan later.

Indian Prime Minister Atal Bihari Vajpayee has already warned
citizens to be prepared for fresh taxes to ease the government's
burden. Appealing for national support, Vajpayee said that while
foreign financial assistance was welcome, most of it would have to
be paid back with interest.

Foreign relief agencies working in Gujarat estimate that it would
take at least four months to bring the region back to a semblance
of normalcy.

Over 400 foreign rescuers -- from Britain, Germany, Israel,
Italy, Russia, Turkey, Switzerland and the United States, among
other nations -- are still trying to find survivors using sniffer
dogs and state-of-the-art detection equipment.

The International Federation of the Red Cross and Red Crescent
Societies has brought in 100 tonnes of relief supplies, including
a 500-bed field hospital and machines to make 130,000 litres of
safe drinking water every day.

Another 350-bed field hospital has arrived from Israel and
Japanese mobile medical units are trying to reach remote areas of
the quake hit region.

For more information on quake relief or to make a donation contact:

Disaster Mitigation Institute

411, Sakar - V, Near Nataraj Cinema

Ashram Road, Ahmedabad

380009, Gujarat, India

Phone : +91-79-6586234, 6583607

Fax : +91-79-6582962

E-mail :


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