The impact of pollution on the Indian economy is “far more consequential than any impact of any tariffs that have been put on India so far,” said Gita Gopinath, former chief economist at the International Monetary Fund, at a discussion hosted by India Today's Kalli Purie at the World Economic Forum.

Gopinath’s remarks came during a session that was titled ‘Can India Become the Third Largest Economy in the World?’ at the WEF in Davos, Switzerland. Purie was in discussion with a panel that included union minister Ashwini Vaishnaw, industrialist Sunil Bharti Mittal, and IKEA CEO Juvencio Maeztu Herrera.

“If you look at the impact of pollution on the Indian economy, it is far more consequential than any impact of any tariffs that have been put on India so far,” said Gopinath. She said that if you look at the annual cost of pollution to India’s GDP, “it’s not just the effect on economic activity, but it’s also the loss in lives”.

To illustrate her point, she cited a World Bank study noting that nearly 1.7 million lives are lost every year in India because of pollution – about 18 percent of all deaths in India. She also noted that even from an international investor’s perspective, pollution is a serious problem because it affects the health of anyone who wants to set up shop in India. Tackling pollution on a war footing, alongside deregulation, is the way forward for India, she said.

Kalli Purie moved from the conversation on pollution to Sunil Mittal, asking him what lessons India can learn from countries like the United States and Europe to improve the ease of doing business.

Earlier, Gopinath had responded to Purie’s remark that there’s a high-level committee led by NITI Aayog member Rajiv Gauba, which is looking at deregulation in India, and whether making another committee to get rid of bureaucratic red tape is the way forward.

“Oh, I assume that this is not just a committee for its own sake but the hope is that it's going to come up with actual actionable plans,” she said. Gopinath remarked how India is still a “challenging place” to do business. She said India must get rid of the “archaic rules that have held back business”, and continue on the path of economic reforms, especially on land and labour. 

Gopinath said that aside from undertaking deregulation to improve the ease of doing business, India must address its pollution problem on a “war footing”, adding that “this has to be a top mission for India”.

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