Kerala Chief Minister Pinarayi Vijayan said that the state has sought a comprehensive financial package from the Centre to tide over the damages that Covid-19 has inflicted on the state.
In Monday’s video conference meet of the Prime Minister with state Chief Ministers, Kerala Chief Secretary Tom Jose represented Chief Minister Pinarayi Vijayan since it was the smaller states that presented their position before Prime Minister Narendra Modi.
Addressing the media after the daily Covid 19 review meeting, Vijayan said the expected loss in the first quarter of the present fiscal for the state would be around Rs 80,000 crore.
“This include over 83 lakh man days lost in the casual labour sector, besides the hotel and restaurant sector, fisheries, IT sector, other organised and unorganised sectors,” he said.
“We have demanded a comprehensive financial package, which includes an interest free loan ranging from Rs 2 to Rs 5 lakh for the small and medium segment business,” he added.
Vijayan said that among the other things that have been raised with the Centre includes footing of the air ticket of those who are financially weak after losing their jobs in the Middle East and are presently waiting to return to Kerala.
“The state government, if required, will do the needful, if the returning diaspora’s children require admission in schools. The Centre should come out with a special package which will help for the rehabilitation of the diaspora who will come from the Middle East. So far 2 lakh diaspora have registered in the Norka-Roots website waiting to be repatriated,” he added.
Economy in trouble
Meanwhile, Finanace Minister Dr Thomas Isaac, a former professor of economics feels times ahead are going to be critical as the world comes out of the Covid-19 crisis. He points at an unprecedented recession in India with Kerala’s economy to be one of the worst hit.
“India’s economy will shrink by 10 per cent and this will lead to the biggest recession, the country has ever witnessed. With regards to Kerala, its economy would be worse than the country’s, as the remittances will take a huge beating leading to reverse multiplier effect,” said Dr Issac.
The eminent economist also gave some solutions to overcome the crisis.
“The Centre should borrow 5 per cent of the GDP from the Reserve Bank of India and give half of it to the states. The rest should be used by the Centre for a stimulus package. The Centre should transfer Rs 7,500 to each and every Jan Dhan account, besides give 50 per cent of the potential last year’s wages paid under the rural employment guarantee scheme as advance. This can be adjusted during the year,” said Dr Issac.
“The Centre should introduce a universal pension scheme. With regards to the MSME sector there should be a moratorium on all loans for a year with the Centre bearing the interest burden. The banks should be asked to provide 25 per cent for working capital,” he added.
Dr Issac India needs to upgrade to attract companies leaving China.
“ I seriously doubt about that as China is hugely mechanised and India just cannot match that. Other South East Asian countries might get an advantage. Perhaps, labour intensive units might look towards India,” said Dr Issac.
He revealed the actions taken by the state government to avoid major financial crisis.
“We have already pumped Rs 20,000 crores into our economy which includes payment to small time contractors. This money effectively circulates in our economy. Rs 8,500 each have been paid to people as social pension that is worth Rs 4,500 crores. Besides we have paid Rs 1,000 each to all people who do not fall into any pension list. Just take a look around and see, things after a month appear to be stable. By the end of May we will settle all out standings that are due to people under various schemes and heads. I think we have done a good job,” said Dr Issac.
Regarding, Keralas’ prospects in the aftermath of Covid-19, Dr Issac said:
The biggest advantage Kerala has is its hugely popular ‘Kerala health brand’. It is in that our state should tap into sectors like pharmaceuticals and medical devices. Urgent steps have to be taken by our Industries Department to set up pharma and medical devices park. Our state-run Kerala State Drugs and Pharmaceuticals can take the lead and we are planning to make it a Rs 200 crores company, to make use of the Kerala brand image.
“There is also a huge scope for Kerala nurses and the need of the hour is to train and keep ready about 25,000 nurses. They should be professionally trained by sending them to finishing schools and get them certification ready. The potential worldwide is huge and we will do everything to tap this.”