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Curbs put in place to tackle air pollution in the Delhi-NCR region are significantly impacting businesses across North India. With the enforcement to Stage IV of Graded Response Action Plan (GRAP), factories in Punjab, Haryana and Delhi-NCR are facing operational hurdles while supply chains are witnessing delays.
Retailers and traders are seeing reduction in footfalls as consumers are looking at reducing exposure and avoiding venturing out for shopping.
A day after GRAP Stage IV was rolled out, the Air Quality Index (AQI) in Delhi dipped to 452 at 6 pm Tuesday from 495, recorded at 9 pm Monday.
The daily average AQI (recorded until 4 pm) also dropped to 460 from 494 in the last 24 hours. Air-pollution issues are not restricted to Delhi-NCR region alone. Out of 258 places across the country for which CPCB monitors the air quality, as many as 153 centres have reported PM 2.5 as a major pollutant in the air while 104 places said it is caused mainly by PM 10 on Tuesday. In some of these places, both PM 2.5 and PM 10 are jointly mentioned as major pollutants.
Industry chamber PHDCCI said besides a health crisis, it is impacting economic activity not just in Delhi-NCR but in Punjab and Haryana as well.
SP Sharma, Chief Economist, PHDCCI said, “In Delhi-NCR, more than one lakh MSME units have been “severely” impacted due to these restrictions imposed under GRAP Stage IV. In Punjab, Haryana and Delhi-NCR region, more than 25 per cent of the 34 lakh MSME units have also been impacted. There are delays in the supply chain due to logistics restrictions slowing down economic activity. From movement of raw material to delivery of finished products factories are facing operational hurdles. This is leading to piling up finished goods inventories, which in turn is also leading to blockage of working capital especially for MSME players.”
Activities halted
Halt in construction activities will lead to push back in delivery schedules, increase labour costs and put a strain on financial commitments for the real estate industry, experts pointed out.
The combined Gross State Domestic Product (GSDP) of Punjab, Haryana, and Delhi, valued at approximately ₹30 lakh crore for 2023-24, is expected to be impacted. “While the immediate impact on GSDP may appear limited at under 0.5 per cent, it could have widespread effects on Industries and livelihoods,” PHDCCI said.
Retailers and traders in the capital city are also seeing reduction in business due to lower footfalls. Praveen Khandelwal, MP, Chandni Chowk and Secretary General, Confederation of All India Traders (CAIT), said, “The issue of air pollution in Delhi has far-reaching consequences, particularly on the trade sector. Air pollution and the restrictions imposed to control it are bound to cause adverse impact creating an estimated loss of business to the tune of almost 20 per cent, a substantial trade loss for the Delhi trading community.”
He added that restrictions on diesel vehicles, including trucks, are disrupting supply chains, delaying the transportation of goods to markets and increasing logistical costs. It may also adversely affect supply of goods & services as Delhi is the largest centre of distributive trade in the country too, Khandelwal said.
Small and medium enterprises, especially in key markets of New Delhi including Chandni Chowk, Karol Bagh, and Lajpat Nagar, Connaught Place, South Extension, Sadar Bazar, Kamla Nagar, Pitampura etc are experiencing revenue declines due to reduced customer visits and supply chain issues.
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