BHUBANESWAR: Nineteen days into the lockdown and another 18 to go, all economic activities in Odisha have come to a standstill, thanks to the coronavirus outbreak. Though impact of the lockdown on State economy is yet to be assessed, sources maintain that agricultural sector will be the worst hit. Rabi crops have been completely ruined and farmers would require financial assistance to start afresh for Kharif.
Though late, the State Government has begun measures to assist the agriculture sector by taking it out from the lockdown. Pisciculture too stands exempted but it is doubtful whether Odisha’s agricultural GDP, which clocks an annual growth rate of about 4.5 per cent, can maintain the tempo.
Highly placed sources in the Government said harvesting of Rabi crop is yet to be over and may continue till May 15. Any assessment of loss or profit can be made only after harvesting is over. Rabi crops including paddy, maize and millet have not been damaged but procurement during lockdown presents a daunting task.
Similarly, industry, IT and MSME sectors have also been hit hard. Export from the MSME sector alone comes to around Rs 1,500 crore to Rs 2,000 crore per year. In IT firms, employees are being asked to work from home or sitting idle as projects are either not being renewed or postponed since USA and Europe have been severely affected due to the pandemic. Unofficial estimates say, there are around 20,000 employees in the IT sector of the State.
Livelihood and employment will be the real challenge. The State has about 1.62 crore workers in the unorganised sector which accounts for 92 per cent of Odisha’s total workforce. Out of this, 68 lakh are agricultural workers whose fate remains unknown. The State Government has decided to pay Rs 1,500 to each of the 35 lakh construction workers registered with Odisha Building and other Construction Workers’ Welfare Board.
With economy in the limbo, revenue generation will be hit. The State had set a target to generate Rs 5,250 crore from the excise which remains one of its major revenue sources. With all liquor shops closed, business is nil. Unofficial estimate is that this sector will alone incur a loss of around Rs 1,500 crore to Rs 2,000 crore.
In the 2020-21 budget presented by Finance Minister Niranjan Pujari on February 18, the State’s own tax and non-tax resources were fixed at Rs 38,500 crore and Rs 17,650 crore respectively.
However, as all the resources generating activities including mining are hit, the State is still counting its losses. The State’s share in Central taxes was estimated at Rs 36,300 crore while Central grant-in-aid fixed at Rs 32,000 crore. It is still early days to guess how the figures will change. Official sources said due to economic slowdown, the State’s share in Central taxes would have dropped by Rs 5,000 crore. This figure is all set to go higher. Meanwhile, the Government has increased the corpus of the contingency fund to Rs 2,000 crore from Rs 400 crore to deal with the situation. It has also demanded more assistance from the Centre to deal with Covid-19.