KOCHI: The business sector in the state is indeed passing through a really trying period. Even as the state’s economy was trying to claw its way out of the devastation caused by the century’s worst flood in 2018, the COVID-19 pandemic put paid to the hopes of staging an economic recovery.
John Muthoot, chairman, Confederation of Indian Industry (CII) Kerala and CMD Muthoot Fincorp Ltd, said the pandemic has inflicted severe damage on industrial activities and economic activities in the state.
“The closure of businesses on account of the nation-wide lockdown and setting up containment zones have resulted in job losses, businesses collapsing and total anarchy since 95 per cent of the businesses in Kerala fall under the MSME category,” he said.
“It is a proven fact that lockdown and containment zone are useful only in ‘flattening the curve’. But this extends the pandemic period by postponing the outbreak among a section of the susceptible population,” he said. John Kuruvilla, director and head, CII (Southern Region) Kerala, said the State Planning Board report estimates a loss of about Rs 80,000 crore in gross value added (GVA) during the First Quarter (April-June) of 2020.
“The tourism industry is among the worst hit. Its total losses from March to September 2020 is estimated at Rs 20,000 crore. The demand slowdown is expected to continue till September 2021,” he said.
The projected shortfall in GVA in manufacturing in March, April and May is Rs 1,500 crore, Rs 4,500 crore and Rs 2,000 crore, respectively. Manufacturing, construction, trade, transport, hotels and restaurants are the sectors likely to be affected immediately as a result of the lockdown.
“These sectors account for 57.7per cent of the state’s total workforce of 127 lakh. This means 73.3 lakh workers are affected by the ongoing lockdown and the subsequent disruption,” he added.
Beena Kannan, CEO, Seematti, said with loss of income, purchasing power goes down and this bodes ill for businesses during the Onam season.
“It has not been a very happy Onam for us since 2018. It was a complete washout in 2018 post the flood. But we could pick up to some extent in 2019. But 2020 is another bad year,” she said. According to John Muthoot, things can’t go on like this.
“If it does, the state’s economy will plummet. So the CII has submitted five proposals before the chief minister”.
The first of these urges the government not to go in for lockdown and containment zones since the healthcare infrastructure in Kerala is adequately equipped.
“All business activities should be allowed with proper safety protocols. CII has prepared a detailed safety protocol and submitted it before the government,” said Muthoot.
“Movement of men and materials should not be hindered under any circumstances,” he said.Unless a person shows Covid symptoms or tests positive, quarantine should not be made mandatory. Besides, the focus and onus on following safety protocols should shift to the public for effectively tackling the pandemic.
“CII will be pleased to work with the government to create a roadmap and strategy for reviving focused industry sectors,” he added.