Kerala workers lose Rs 13,650 crore in wages during lockdown due to COVID pandemic

Rajesh Ravi, a 42-year-old auto-rickshaw driver in Thiruvananthapuram, the capital city of Kerala, could earn only Rs. 400 in the last 30 days.

“Pre-lockdown, my monthly earning was around Rs. 10,000, with which I could manage my five-member family budget. Now, we are in real trouble. I hate taking loans. But this month, I have taken a loan from a friend. And I don’t know how to repay it,” Rajesh said.

Rajesh is one of the 73 lakh self-employed and casual workers in the state, which is 57 percent of the total workforce in Kerala, who has lost their livelihood due to the pandemic-enforced lockdowns.

Since May 8, Kerala has been under lockdown to contain the spread of COVID-19.

Considering the extended lockdowns, even the Kerala High Court had, on May 19, 2021, passed a detailed interim order with respect to all pending proceedings before it, as well as before all lower courts/Tribunals in the state, extending the life of its interim orders, orders from matters relating to Section 138 of the Negotiable Instruments Act and interim bails till May 31, and directing that no coercive actions be taken till that date.

Since the state government further then extended the lockdown till June 9, the High Court decided to extend the interim orders till June 15, 2021.

On extending the interim order, the court said in its order that “as lockdown continues, the difficulty of the litigants and learned counsel to approach the courts also continue and, therefore, the need to extend the interim orders.”

In light of the lockdown being extended by the state government till at least June 16, the High Court further extended its order dated May 19 till June 29.

When a total lockdown was imposed on May 8, the TPR was 28.25 percent in Kerala. Now, as of yesterday, it has come down to 11.26 percent. Kerala has reported 27,28,239 cases of COVID-19, with 11,181 deaths.

The current lockdown is till June 16; however, Kerala Chief Minister Pinarayi Vijayan had indicated last Friday that lockdown may continue till the spread of COVID is contained, setting out his government’s objective as bringing the TPR to below 10 percent.

“If the government is going to extend the blanket lockdown again, then it’s going to push us daily wage earners like us into more trouble. We don’t know how long we will be able to face this uncertainty. One day, we may break down…” Rajesh added.

A study published by Kerala Planning Board (KPB) had analysed the 2020 lockdown and revealed that the loss of wages or earnings to workers in Kerala during the lockdown period amounted to roughly Rs. 350 crore every day.

Going by that metric, in this 39-day long lockdown in 2021, Keralite workers are going to suffer a loss of wages amounting to Rs. 13,650 crore.

Additionally, the KPB study says that the Gross Value Added (GVA) by the manufacturing sector in Kerala in one day is about Rs. 220 crore, and by trade as well as hotels and restaurants in a day is about Rs. 500 crore.

Since these sectors have been reached an almost complete stand-still during the current state lockdown, for this 39 days lockdown, Kerala would suffer a GVA shortfall of Rs 28,080 crore in the 39 days of the lockdown. This will add more stress to the debt-ridden Kerala economy.

Overall, in these 39 days, the loss suffered by the Kerala economy would be roughly Rs.40,950 crore.

According to the KPB report, the 2020 lockdown had resulted in a revenue loss of about Rs. 20,000 crore in the tourism sector, Rs 1,371.3 crore in the fisheries sector, and Rs. 9,600 crore in the transport sector in the state.

The report estimates that Kerala suffered a revenue loss of Rs. 80,000 crore due to the 2020 lockdown.

Kerala’s revised 2021-22 Budget reveals that the state’s revenue deficit is Rs 16,910 crore, which is 1.93 percent of the Gross State Domestic Product (GSDP).

In January, the then Kerala finance minister Thomas Isaac had said in the state assembly that the state’s public debt has doubled almost every five years.

A recent Comptroller and Auditor General of India (CAG) report on Kerala’s finance also reveals that the state’s total debt burden has seen an increase from Rs. 1,41,947 crore in 2014-15 to Rs. 2,41,615 in 2018-19.

“The overall fiscal liabilities of the state increased from 1,41,947crore in 2014-15 to 2,41,615 crore in 2018-19, thus recording an increase of 70 percent during the five years. During 2018-19, the growth rate of fiscal liabilities was 12.63 percent and it was the lowest during the five years,” the CAG report says.

According to the current Finance Minister of Kerala K.N. Balagopal, in the last financial year, the state’s GSDP came down by 3.82% compared to the previous year.

Balagopal also admitted that the growth rate that was positive for decades fell under the impact of the Covid-19 induced lockdown and state revenues recorded a decline of 18.77%.

According to Dr. K.T. Rammohan, former Dean, Faculty of Social Sciences at Mahatma Gandhi University, the Kerala economy has been ravaged by two successive floods and repeated waves of the pandemic.

“Persistent lockdowns and continuing restrictions on mobility have spelled serious disruption of production and distribution of goods and services, and income,” Rammohan said.

In Kerala, at the end of the 2020-21 financial year, the net public debt of the state was nearly Rs. 33.5 thousand crore, rising from Rs. 30.5 thousand crore the previous year.

In 2020-21, salaries, pensions and interest payments form approximately 70 percent of the state’s total revenue expenditure.

According to Rammohan, any failure on the part of the government to pay interest or redeem the principal as and when these are due would seriously affect the credit rating of the state.

“Effective debt management is therefore critical. Regrettably, the government’s performance on this front is far from satisfactory,” Rammohan added.

Meanwhile, Mini Mohan, a psychologist and human rights activist in Kerala, said that simply supplying food kits won’t help people

Meanwhile, Arun N.M., a Kerala physician who keenly follows COVID-19 data, said that lockdown should be imposed rationally.

“The government should increase the number of tests rationally to reduce the TPR. Instead of locking down the entire population, it would be better to find more Covid positive people and lock them down,” Arun said.

State government data reveals that on May 8, a total of 148,546 samples were tested, on June 14, only 68,573 samples have been tested.

In April this year, The Lancet COVID-19 Commission India Task Force, in its report ‘Country-wide Containment Strategies for Reducing COVID-19 Cases in India‘, said that there are no binary choices to be made, or ‘one single policy option of a complete lockdown’.

“A series of actions are needed,” the report states. It opines there is targeted containment required and coordinated response.

“The exact steps taken may differ based on local contexts. In areas where infections are spreading rapidly, short, severe closures may be required; where case counts are low, containment measures may be appropriate,” it added.

In October 2020, the World Health Organization’s Europe Chief Dr. Hans Kluge had said that lockdown should be “a very very last resort.” But in India, especially in Kerala, lockdowns seem to be imposed without assessing the direct risks and collateral damage.

Without getting cash in hand, the majority of the 75 lakh workers in the state are falling into economic and mental depression as uncertainty over the future is haunting them daily.

(IPA Service)

Courtesy: The Leaflet