If Unchecked, Air Pollution Could Influence Investor Behaviour, Even Dent Stock Market Performance

And the impact of air pollution, the man-made sources of which include the annual practice of paddy stubble burning, goes beyond health risks — it takes a toll on investments and economic growth as well; and even dents the stock market performance:

India annually registers a welfare loss of US$560 billion and 1.67 million premature deaths due to air pollution. And the figures would only be on the rise if air pollution goes unchecked.

As per a study published in the National Institutes of Health (NIH) (US), "air pollution can negatively affect stock market performance", and "even worsen it by depressing investors’ sentiments".

Further, behavioural economics has shown a correlation between air pollution and investor sentiment, which could inadvertently hinder investment prospects. According to another study, published in ScienceDirect, "heightened pollution, through increased environmental regulations, hinders corporate investment". This is essentially attributed to air pollution "impairing the cognitive ability of corporate managers".

The pollution crisis in the national capital becomes so alarming over the years that the last Assembly polls saw all major political parties promising to introduce a slew of measures promising to control it.  

One of the major poll promises of the Bharatiya Janata Party (BJP), which came to power in New Delhi, was bringing down pollution levels in the national capital. In June this year, newly sworn-in Delhi Chief Minister Rekha Gupta announced a series of measures to curb air pollution. 

A Holistic Approach Is The Need Of The Hour

As fear looms large over environmental degradation and severe air pollution, experts sound caution, calling for a holistic approach and comprehensive measures.

"As the paddy harvest has commenced, farmers have also started burning crop residue in the vegetable-growing regions of Amritsar, Punjab, and some pockets of Haryana. Punjab and Haryana possess over 2.5 lakh crop residue management (CRM) machines distributed in Punjab and Haryana, sufficient to cover the entire paddy farms," Kurinji Kemanth, Programme Lead at Council on Energy, Environment and Water (CEEW), told The Secretariat.

For the road ahead, India could take a cue from Beijing, which was once reeling under the impact of air pollution. In a decade, Beijing reduced air pollution by up to nearly 90 per cent.

China set an example in combating the pollution crisis through a series of comprehensive air pollution control programmes and concerted, multi-faceted efforts: strict enforcement of rules, reducing coal reliance, urban planning, and promoting public transport, among others.

A Viable Solution? 

In case of the stubble burning issue, a strengthened and enhanced Custom Hiring Centres (CHCs) may prove to be a viable alternative for crop residue management.

"This year, the government's focus should be on strengthening CHCs, which can enhance access for farmers to crucial machines such as superseeders, at just 10 to 33 per cent of the purchase cost," Kurinji further said.

"Given that they already own nearly 30 to 40 per cent of the CRM machines in these states, offering incentives for the best-performing CHCs, targeted operational subsidies, and developing machine management plans can make them reliable service providers for farmers," she says.

Stubble Burning

Contrary to widespread belief, stubble burning in Punjab and Haryana contributes to only nearly 15 per cent of Delhi-NCR's PM2.5 levels.

Yet, it remains a burning challenge that blazes up every year, coinciding with the festival season.

Stubble burning is a common agricultural practice wherein farmers, in an effort to prepare the fields for the next crop or season, purposefully set fire to crop residue (stubble) following harvest.

Stubble burning customarily begins in late September in states including Punjab, Haryana, and Uttar Pradesh, following the harvest of paddy crops.

Its consequences are often attributed to severe environmental degradation and air pollution.

Already, 48 fires, 8 FIRs, and 13 red entries have been recorded and registered in the matter of just five days (between September 15 and 20). And it is only the beginning.

The Role Of Custom Hiring Centres

CHCs are established by the Central government under the CRM scheme to offer farmers access to agricultural machinery, including Happy Seeders, on an affordable rental basis. Happy Seeders were developed with the primary intention of putting an end to stubble burning.

Though the Central government has established a vast network of CHCs across states such as Punjab, Haryana, and Uttar Pradesh, maintenance of the centres, their sustainability, and farmers' participation continue to be key challenges.

Once the role of CHCs has been clearly established and their functioning strengthened, more farmers would come forward to avail themselves of the subsidised machinery. Thus, the centres could aid the farmers in in-situ crop residue management, deterring them from resorting to burning the stubble.

Awareness remains crucial. "The states should launch targeted awareness campaigns and carry out strict surveillance in high-burn villages. Additionally, officials from agricultural departments and KVKs should encourage farmers to supply stubble to nearby industries for additional income," Kurinji underscores.