Kerala economy has more reasons to worry over Covid-19

Kerala economy has more reasons to worry over the Covid pandemic as NRI remittances, which has been a major source of the state's economy, is likely to be hit as over six lakh Malayalis working abroad were feared to have lost jobs.

Even as the state has been witnessing the NRI deposits at banks steadily increasing and crossing the Rs 2 lakh crore mark earlier last year, already the NRI deposits witnessed a decline by Rs 2,400 core, state finance minister Thomas Isaac informed the Assembly recently. According to the latest Kerala Economic Review, there was 65 per cent decline in money transfer through private foreign exchange dealers.

NORKA-Roots, a filed agency of the Non-Resident Keralites Affairs Department of Kerala, has estimated that around six lakh Malayalis working abroad lost jobs over the last year.

According to sources in NORKA-Roots, of the 9.4 lakh Malayalis who returned to Kerala from January 2020 onwards, of which around 6.3 lakh cited job loss as the reason. Of that only around 65,000 were found to have returned so far. The major chunk of returnees is from Gulf countries, especially the UAE.

Earlier surveys estimated that around 30 lakh Malayalis were working abroad, the majority in Gulf countries.

According to data available from the State Level Bankers' Committee - Kerala, the NRI deposits in banks in Kerala reached Rs 2,08,698 crore in March 2020 from Rs 1,90,055 crore in March 2019.

The Kerala Economic Review for 2020 said that as per the information gathered from authorised foreign exchange dealers there has been a reduction of 65 per cent in a private transfer from January 2020 to May 2020, almost to the extent of Rs. 5,691 crore in absolute terms. The total remittances to Kerala, including private transfer and NRI deposits, was estimated to be around Rs. 2.7 lakh crore in 2020-21.

Fr Abraham Mulamoottil, president of Central Travancore Chamber of Commerce, said that the uncertainties in the job sectors abroad, mainly Gulf countries, were already being reflected at places like Thiruvalla in Pathanamthitta district, which is considered to be one of the hubs of NRKs, as shops in the region were not having much business. Even as life was almost back to normalcy and streets are witnessing huge crowds, the shops were not getting adequate business. It may be because families of NRI's are now spending cautiously only, he said.

NORKA Roots chief executive officer Harikrishnan Namboothiri said that apart from the rehabilitation schemes already being offered for the NRIs, fresh schemes like skill enhancement programmes were being initiated. The Kerala government also announced Dream Kerala project that aimed at making use of skills and competency of NRKs for Kerala's development.