Already ravaged by Ockhi Cyclone and two consecutive floods during the previous years, Kerala has suffered a revenue loss of Rs 1.56 lakh crore due to the COVID-19 pandemic and subsequent lockdown, state Finance Minister T M Thomas Isaac said on Thursday. Isaac, who tabled the Left government’s Economic Review 2020 in the state assembly, a day ahead of the state budget, said natural disasters including Cyclone Ockhi of 2017, two consecutive floods of 2018, ’19 and the pandemic affected the state’s economy along with the return of non-resident Keralites (NRKs) from abroad, mostly following job loss.
The state’s growth rates, which were higher than the national rates of growth saw a downward trend in 2019-20, due to the setbacks the state economy faced during the last three years, the Review said. “The natural disasters ravaged the state economy affecting the lives and livelihoods of many and adversely affecting productive sectors of the economy,” it said.
“Kerala suffered a revenue loss of Rs 1.56 lakh crore due to COVID-19. In tomorrow’s budget we will discuss how to overcome the post-COVID situation in the state,” the minister told reporters later. The 100 days programme, to revive the social and economic life in the state launched in September last year, was “the exit strategy” of the government to overcome the pandemic crisis, Isaac said.
“While the target of the government was jobs for 50,000 people, over one lakh jobs were created,” he said. The Economic Review said the state’s economic growth rate has dipped to 3.45 per cent in 2019-20 from 6.49 per cent in 2018-19 owing to various natural calamities.
“The quick estimate of Keralas Gross State Domestic Product (GSDP) at constant (2011-12) prices is Rs 5.68 lakh crore in 2019-20 as against the provisional estimate of Rs 5.49 lakh crore in 2018-19, thus registering a rate of growth of 3.45 per cent in 2019-20. The corresponding rate of growth in 2018-19 was 6.49 per cent,” the Review said. According to the Planning Board estimate, the shortfall in value addition in the State was Rs 29,000 crore during March 2020, assuming 10 days of total production loss and decreased economic activity from the middle of March.
The Board calculated the loss for the quarters of 2020-21 with reference to the estimate for the corresponding quarter of 2019-20 and based on this, the first quarter Gross Value Added (GVA) of 2020-21 was estimated to shrink to around 26 per cent of 2019-20 first quarter GVA. “The loss in GVA during the second Quarter of 2020-21 compared to the same quarter of the previous year is estimated to be 18.5 per cent,” the Review said.
To add to the state’s woes, several non-resident Keralites (NRKs) had returned following job loss due to COVID-19 crisis, impacting remittances. The number of return emigrants estimated by Kerala Migration Survey 2018 was 12.95 lakh, about 60 per cent of the number of emigrants.”However, this has increased further by the crisis caused by the Covid-19 pandemic,” the Review said.
On the basis of past trends, the state planning board has estimated the total volume of remittances of Kerala, including private transfer and NRI deposits to be Rs 2.7 lakh crore in 2020-21. “As per the information gathered from authorised foreign exchange dealers, there has been a reduction of 65 per cent in private transfer from January 2020 to May 2020, almost to the extent of Rs 5,691 crore in absolute terms,” the review said, adding that as many had lost their jobs and returned to Kerala, there has been a drastic reduction in transfers through exchange dealers.
The Review, however, said in case of NRI deposits, there was an increase in the amount deposited by emigrants. It said the total deposits in NRI accounts in the commercial banks of Kerala was Rs 1.99 lakh crore in December 2019 and it increased to Rs 2.11 lakh crore by June 2020.
Deposits have increased by 0.12 lakh crore from January to June last year. The pandemic and the subsequent lockdown also affected the tourism sector with a loss estimated to be in the range of Rs 20,000 crore to Rs 25,000 crore over the nine months of 2020,besides the Kerala Micro Small and Medium Enterprises in the state.
State planning board Vice Chairman, Dr V K Ramachandran, who also attended the press meet along with the minister, said from May to June 2020, trade, hotels and restaurants suffered an estimated shortfall of Rs 17,000 crore.
Source: News18