By Amit Kapoor and Meenakshi Ajith
On 26 August a glacier came away above the Nepal-Tibet border, killing more than a thousand people and leaving a reconstruction bill Nepal’s finance minister puts at four to five billion dollars, close to a tenth of the economy. Typically, weather is the atmosphere over hours and days, climate the atmosphere over decades, and the distinction once held on the damage side too, a day’s event costing a day. But now, what arrives in a morning is paid for across a decade, and what arrives as weather is beginning to work on the economy the way climate does, cumulatively, without reversing. India shares those mountains and the rivers draining them, but it does not need a glacier to meet the same problem. The shift shows up in ordinary weather, arriving more often and staying in the accounts longer. Until recently a deficient monsoon thinned the harvest and lifted food prices for a season, but the disturbance stayed within agriculture and reversed itself once the rains returned. Today, by contrast, a week of unseasonal rain takes out roads, substations and the lines between them, while a week of extreme heat removes working hours from every construction site and factory floor, a loss that appears on nobody’s books. What was once a sectoral shock has become a general one, transmitted through prices, through power system planning and, in time, through the public finances. India can see all of this coming, in finer detail with every passing year, a warning that once covered a state now covering a cluster of villages days in advance. Weather has become a macroeconomic input that India has yet to learn how to price.
The aggregate numbers have begun to register the change. In early June the Reserve Bank lowered its growth forecast to 6.6 per cent and raised its inflation forecast to 5.1 per cent, citing energy prices alongside a weak monsoon, and peak demand touched 270.8 gigawatts on 21 May against roughly 180 in 2019, even as 8,133 gigawatt hours of solar were curtailed at midday on figures given to parliament. Such numbers establish that something has happened without saying where or at what cost, and a shock that cannot be located cannot be priced. National monsoon rainfall in 2025 stood at 108 per cent of the long period average, while east and north-east India received 80 per cent, the region’s second lowest since 1901, an average that was accurate and described no actual place. This monsoon has made the point more sharply, districts of Upper Assam with little recent experience of inundation going under as cloudbursts upstream sent the Dikhow into the plains ahead of the Brahmaputra’s own peak.
The Bharat Forecast System, built at the Indian Institute of Tropical Meteorology, runs on a six-kilometre grid, finer than any other national service, while Mission Mausam promises five-kilometre forecasting and household level warning by 2030. The collapse shows what this does not cover. Researchers returning to Sentinel-1 radar found the slope creeping at ten millimetres a month beforehand, a signal that would have alarmed nobody, since Himalayan slopes move without failing and nothing scans thousands of them for motion this slight. SERVIR-Hindu Kush Himalaya, run by ICIMOD with NASA and USAID, was building towards that when its American funding stopped in January 2025. Capability held on another country’s budget line does not appear on yours, and its withdrawal does not either. Remarkable as India’s systems are, they are half of what climate intelligence means, which covers not only seeing a hazard approach but saying what it will cost, to whom it will fall, and who pays. A forecast that cannot be turned into a number has no standing in a budget.
Turning one into a number begins with knowing what stands in its path. Assam can report how many kilometres of embankment need repair, but there is no asset level register of what sits inside a floodplain, or what it is worth. The IMD’s annual report counts more than 2,690 deaths from extreme weather in 2025, on media reports and state agencies, fairly enough, since no forecasting agency should keep a national loss ledger. A model can infer a building from a photograph, but not a loss that was never written down. Swiss Re finds 93 per cent of India’s catastrophe exposure uninsured, and the pilots are slight, one heat product examined by Prayas paying 1,100 rupees, too little to change what a household does. The instruments exist, a UNFCCC paper listing early warning linked to automatic payouts across developing countries. What is missing is the series a defensible trigger must rest on.
The obstacle is not money either but architecture. Assam’s disaster allocation has risen across three Finance Commissions, from 2,541 crore rupees to 4,742 and a recommended 5,825, weighted seventy per cent on past disaster expenditure and thirty on a risk index. Past expenditure is a defensible measure of recurring need; the weighting is what fails, since a formula anchored so heavily in spending recognises a new geography of risk only after damage accumulates within it. Nor can Assam’s allocation be spent upstream in Nagaland, where much of the Dikhow’s catchment lies, since disaster finance is organised by state while a river basin is not.
The remedies are institutional, and they will not arrive unbidden. Markets left alone will not point artificial intelligence at public goods. If budgets are to apply forward looking criteria, those criteria need something to be forward looking about: an exposure register published at panchayat resolution, a disaster information system turned into an audited loss series recording economic damage alongside lives, and money moving on measured indices through a standing budget line, along basins rather than boundaries. Automatic payment is not an argument for relief over prevention but its precondition, since a state able to price a flood in advance can justify the spending that averts one, and it should be judged by the capacity that spending creates rather than the sums allocated.
India has made its weather legible, and the next decade of climate intelligence will be judged by whether it can make the consequences legible too, in registers of what stands exposed and of what was lost. An economy that can price its weather can insure it, budget for it and build against it. One that cannot will keep discovering the cost afterwards.
(Amit Kapoor is Chair and Meenakshi Ajith is Development Policy Lead at Institute for Competitiveness.)
The article was published with Economic Times on September 8, 2026.
