The cost of repairing the damage from the deadly and tragic earthquake that ripped through India's industrial heartland will impose an enormous burden on the country's flagging economy, economists said today.
India has asked the World Bank for $1 billion and the Asian Development Bank for $500 million to help rebuild the state of Gujarat which has a population of 41.3 million people.
An influential business lobby, the Federation of Indian Chambers of Commerce and Industry (FICCI), put building and construction losses across Gujarat at about $3.2 billion (euro 3.5 billion).
Many insurance policies offer quake coverage but India is generally regarded as underinsured, which will exacerbate costs.
Apart from the loss of human life in which there was wide destruction of commercial and residential buildings, its huge petroleum refineries, chemical and textile plants and pharmaceutical factories were relatively unscathed along with the country's busiest port of Kandla.
Economists said there was no doubt the reconstruction bill would have an impact on the country's already gaping fiscal deficit.
In the last financial year to March 2000 India overshot its deficit target of 799.55 billion rupees (euro 18.7 billion) by nearly a third - partly due to a war with Pakistan over territory in disputed Kashmir and a cyclone that devastated the eastern state of Orissa.
This year's government budget deficit is targeted at 1.17 trillion rupees (euro 273 billion).
Reuters