Amidst the coronavirus pandemic and face off with China, the issue of “Roti Kapda Makaan” has come back to haunt the minds of millions of people in India with the GDP tanking more than 23 per cent in first quarter of the fiscal 2020-21. This is the worst since the government began publishing quarterly gross domestic product figures in 1996.
For states like Assam which is going to polls it has become much more pressing to come out with corrective economic measures soon. And the realisation has not bypassed the ruling BJP government in the state. But will it be able to tide over the imminent economic crisis which is threatening to go out of control?
The state finance minister, Himanta Biswa Sarma, on Tuesday, in the floor of the assembly, said that the state government will provide compensation against loss suffered by the people due to the COVID-19 induced lockdown.
However, he did not spell out the exact details of how the government will carry out the process.
“The most direct impact of the losses was upon the hotels, hospitality, retail and allied industries and mostly they come under the unorganised sectors. But the bailout has to come soon otherwise the bad situation will turn into a point of no return for many businesses,” Srinjoy Kalita, a city based hotelier said.
Echoing similar sentiments, a city based apparel retailer said that sales have nosedived and with work from home becoming the new normal, demand for clothes has nearly touched nil since the start of lockdown in March 23.
In fact, many apparel retail shops have downed their shutters in prime market areas like Fancy Bazar and GS Road in Guwahati.
Speaking in the state Assembly during a discussion on The Assam Appropriation (no III) Bill, 2020, the finance minister said, “The government is preparing a scheme under which we can provide some compensation in November or December against the losses suffered. It is not finalised yet and is still to be discussed in the cabinet, but we definitely have the issue of losses of the people in our minds.”
But it is easier said than done considering the present situation of the state exchequer. According to an estimate, nearly Rs 580 crores has been spent towards COVID 19 expenses including treatment of patients in Assam by the government, while about Rs 196 crores have been received from the central government for handling the pandemic so far.
On top of that there was a 90% GST collection loss in the state in April due to the first phase of nationwide lockdown. And with partial lockdown still in force in the state the losses have minimised but still it is in higher proportion.
A report prepared in May last by the State Innovation and Transformation Aayog (SITA), which falls under the Transformation and Development department, had claimed of a sharp fall in the growth rate of the state’s economy and rise in unemployment and poverty levels.
In the national scenario, India's National Statistical Office said the economy contracted by 23.9% in the first quarter of the 2020-21 fiscal year, which ended in June, compared with the same quarter the previous year. It’s the worst performance since the government began publishing quarterly gross domestic product figures in 1996.
And it's the worst decline among the world's major economies releasing GDP figures for that same quarter, according to data from the Organization for Economic Cooperation and Development.
