First two lockdowns cost Assam’s economy Rs 33,000 cr, says govt panel

Chief Ministerial Sarbanand Sonowal had appointed the high-level committee to suggest ways to boost the economy that has taken a hit during the lockdown to contain the Covid-19 pandemic.(PTI)

Assam’s Gross State Domestic Product (GSDP) suffered Rs 32,617 crore losses during the first two phases of the lockdown to control spread of Covid-19, says the report of a high powered panel formed by the state government to recommend measures to revive the economy.

The seven-member committee for revitalization of Assam economy headed by retired IAS officer Subhash Chandra Das had submitted its recommendations to Chief Minister Sarbananda Sonowal on Monday.

While the details of the report has not been made public, HT has managed to take a look at its contents, which suggests focus on key areas like agriculture and economy to help mitigate the losses suffered because of the lockdown.

According to the report, the primary sector, which includes agriculture, forestry, mining etc. suffered losses worth Rs 8,175 crore and the secondary sector that includes manufacturing, construction, electricity etc. lost Rs 7,546 crore.

The tertiary sector that includes service like hotels, restaurants, real estate, transport etc. suffered the biggest hit losing Rs 14,787 crore. The state also lost Rs 1,659 in taxes during the 40 days of the first two lockdown phases that started on March 24 and continued till May 3.

The advanced estimates of GSDP for Assam for the year 2019-2020 is Rs 3,45,957 crore or an average GSDP of Rs 947 crore daily. The report said that the loss due to lockdown was about 9.5% of the present GSDP.

The report also estimates that between 15.7 lakh and 27.1 lakh people could become unemployed in Assam. The rate of unemployment could increase from the present 8% to up to 27% because of the lockdown as well as estimated return of six lakh to 10 lakh workers from other states in the country.

Due to return migration of workers back to the state, Assam is expected to lose around Rs 3,600 crore annually in the form of remittances, the report said.

Due to unemployment, the poverty ratio in the state could jump from 32% (2011-2012 figure) to as high nearly 51% if there’s a 15% fall in income. This could have number of social implications, the report said.

It warned that unemployment and poverty could lead to a rise in thefts and robberies and if hardships escalate it could lead to bigger security issues with spurt in incidents of trafficking of children and women, prostitution and child labour.

The estimated loss in revenue collection from March, 2020 till May 21, 2020 is Rs 1,155 crore and there would be an expected shortfall of Rs 10,214 crore to the state’s revenue till December, 2020, the report stated.

The committee suggested waiving off loans taken by farmers for raising crops during Rabi season of 2019-20, compensation to pig farmers who lost pigs due to African Swine Fever (ASF) and one-time compensation of Rs 5,000 each to agricultural labourers.

For the industries sector, it recommended interest subsidy of 3% to 4% for two years for loans availed under guaranteed emergency credit line (GECL) scheme to the micro, small and medium enterprises (MSME) to reduce the interest burden. It also suggested the government to consult with banks and try to reduce interest subsidy of 3% to 4% for two years on working capital loans taken by MSMEs.

To improve employment, the committee suggested increasing work-days limit from 100 days/year to 150 days/year under MGNREGA, increasing the amount of Rs 2,000/month paid to workers from Assam who stayed back in other states to Rs 4,000/month while extending the scheme till August, 2020.

Setting up of a farmers’ commission, notification of the state agriculture policy, creation of a land bank for infrastructure projects and a comprehensive social security scheme that takes care of workers for 6 months if they lose their jobs are some other suggestions made by the committee.

News Source Hindustan Times