KOCHI: Delivered a crippling blow by Covid, state will have to do a delicate balancing act to fill its empty coffers. Express puts in perspective what needs to be done to get the economy up and going yet again
For a state struggling to pull itself out of the impact of back-to-back flood, the global Covid outbreak and the subsequent nationwide lockdown has spelt doom. All revenue resources, including income from sales tax, Excise duty, vehicle tax and sale of lottery-liquor, have been stalled and the state is struggling for funds to run its day-to-day business. Compounding the state’s woes, the economic slowdown in West Asia, on account of oil’s chaotic collapse coupled with the Covid pandemic, has rendered several thousand Malayali expats in the Gulf jobless. The major challenge for the state will be rehabilitating the Gulf returnees while initiating concrete steps to revive the economy.
The State Planning Board which conducted a quick assessment of the lockdown’s impact on Kerala’s economy has recommended that the state should draw lessons from the pandemic experience and use the opportunity to attain self-sufficiency and use the global acclaim received by it for effectively combating major viral outbreaks to hard sell it as a health destination.
According to the Planning Board, the state has suffered a loss of about Rs 80,000 crore in gross value added (GVA) to the economy in the first quarter(Q1) of 2020. The sectoral assessment says the agriculture sector has suffered a loss of Rs 1,570 crore while the livestock and poultry loss came to Rs 181 crore. The tourism sector which was dealt a severe blow by the lockdown is expected to incur losses to the tune of a whopping Rs 20,000 crore in 2020-21, the board estimates. The ripple effect may see lay-offs, rationalisation of staff, unpaid days of leave and loss of livelihood to the 15 lakh workers employed by the sector.
The study expects a shortfall of Rs 8,000 crore in GVA in the manufacturing sector from March to May. The shortfall in GVA in trade and hotel and restaurants during the same period is pegged at Rs 17,000 crore, with April witnessing a humongous loss of Rs 10,000 crore. The self-employed and casual workers in the state are expected to suffer a loss of earning to the tune of Rs 350 crore on each day of the lockdown. During the four months from March to June this can translate to a loss of Rs 15,000 crore. Out of the 127 lakh workforce in the state, 48.1 lakh are self-employed while 35.2 lakh are casual workers. The state has around 43.8 lakh regular workers who may not be badly impacted by the lockdown as they enjoy the benefits of social welfare schemes.
The fisheries sector has suffered a loss of Rs 2,000 crore, while the transport sector will suffer a loss of Rs 9,600 crore. The decline in earnings of the IT sector is estimated to be around Rs 4,500 crore. Apart from this, the report forecasts the loss of 26,236 IT jobs. In terms of loss of earnings, the one crore workers in the state have suffered a loss of Rs 560.8 crore per day. From March 24 to May 3 the loss in earnings by the workers is estimated to be Rs 24,719.9 crore.