BUSINESS

ECONOMICS
SUBMITTED BY,
GADHA S UDAYAN
R E G N O . 1 9 0 1 7 2 1 0 3 4 0 12
IMPACT OF COVID-19 ON
KERALA
INTRODUCTION
▪The world has been experiencing a rare disaster of corona virus (Covid-19) pandemic since
December 2019. The Covid-19 has spread to 215 countries and territories in the world. Most of
the countries in the world has been implementing quarantines and social distancing practices to
contain the pandemic and implemented lockdown.
▪The 68 days national lockdown in India has inflicted severe damage on all sectors of national
and state’s economy and pushed the economy to an unprecedented recession.
▪The Covid-19 has created a multiple crisis in several fronts- health; travel; economy; finance;
prices; production and output; employment and unemployment; emigration and remittances;
fiscal situation of government etc..
▪In this context an attempt is made to examine the impact of covid-19 on Kerala’s economy.
KERALA
➢ Kerala is a state on the
southwestern Malabar Coast
of India.
➢ It was formed on 1
November 1956.
➢ It is divided into 14 districts
with the capital being
Trivandrum or
Thiruvananthapuram.
➢ Malayalam is the official
language of the state.
 ▪ The first case of the COVID-19 pandemic in Kerala (which was also the first in
OUTBREAK all of India) was confirmed in Thrissur on 30 January 2020. The affected
person had a travel history from Wuhan, China to Thrissur district.
OF ▪ Between January and May 2020, the rate of growth of COVID-19 cases was
COVID-19 very small. But during the month of July and August there has been a steep
increase in the number of COVID-19 cases.

▪ The Keralites stranded in other states in India and foreign countries are given
permission to return to Kerala. a large number of Keralites returned from other
states and foreign countries especially from Gulf countries. This contributed to
a substantial increase in the number of COVID-19 patients since July2020.

▪ The total number of COVID-19 cases increased to 76,526 and deaths to 299 as
on September 1, 2020. A review of the district wise COVID-19 as on
September 2020 shows that Thiruvananthapuram district has the largest number
of COVID-19 patients and death. The district which has the lowest number of
cases is Wayanad.

▪ The largest single-day spike was reported (11,755 cases) on 10 October and
Kerala now has the 6th highest number of confirmed cases in India. As of
October 2020, more than 90% of known cases were due to community spread.
Map of districts with number of active cases, as of
3 November 2020
6400-12800 active cases
3200-6400 active cases
1600-3200 active cases
800-1600 active cases
400-800 active cases
COVID-19 Pandemic in Kerala by District
 ▪An expert committee by the Kerala government into the
extension of the Covid-19 lockdown has suggested that it

LOCK
continue in a phased manner.
▪The committee, comprising of 17 experts from various fields,

DOWN
recommended phasing the lockdown over three stages,
starting from April 15. Kerala Chief Minister Pinarayi Vijayan
will be sending the report to the Centre for its consideration.
▪The report comes as several states have been requesting the
Centre to prolong the 21-day lockdown which will end on
April 14. The expert committee assessed that the time is not
yet ripe for full withdrawal of the lockdown on April 14.
▪The Committee has recommended a gradual and phased
withdrawal strategy to ensure that the caseload is always kept
below the (surge) capacity of the healthcare system to deal
with it.
THREE-PHASE RELAXATION OF LOCKDOWN
The committee recommended that the lockdown be relaxed district-wise in three phases starting
from April 15.

Criteria for Phase I relaxation of lockdown:

1. A District will qualify for Phase 1 relaxation of restrictions only if it satisfies the following
criteria:
▪ There has been not more than ONE new case in that district for the entire week prior to the date
of the review. (For the first review on April 14, 2020, the relevant period will be April 7-13,
2020)
▪ There has been no increase more than 10% of the number of persons under home surveillance
in that District (base as on April 7, 2020) as on the date of the review.
▪ There are no hotspots of Covid infection anywhere in the district as identified by the Health
Department.
Criteria for Phase II relaxation of lockdown
2. A District will qualify for Phase II relaxation of restrictions at the time of the second review only if it
satisfies the following criteria:

▪ There has not been more than one new case of Covid infection in that district the entire fortnight
prior to the date of the review.

▪ There has been not more than a 5 per cent increase in the number of persons under home
surveillance in that District from the date of the previous review.

▪ There are no Covid infection hotspots in the district.

Criteria for Phase III relaxation of lockdown
3. A District will qualify for Phase IIII relaxation of restrictions at the time of the THIRD review only
if it satisfies the following criteria:

▪ There has been no new case of Covid infection in that district for the fortnight prior to the date of
review.

▪ There has been a decrease of more than 5 per cent of the number of persons under home
surveillance in that District from the date of the previous review.

▪ There are no hotspots of Covid infection anywhere in the district as identified by the Health
Department
REVENUE
▪The Revenue sector of Kerala for the first 47 days of lockdown is 80000 crore. The loss would
be Rs 1.62 lakh crore if it takes three months for the state to get back to normacy. The growth
rate would fall to an all-time low of -13.56%.

▪There is a shortfall of RS 33455 crore in revenue decline from the budget estimate still now. The
short fall in GST and Central Tax devolution contributed to the downfall. There is a significant
decline in the tax and no-tax revenue due to the lockdown induced reduction in the economic
activities. The revenue fall of GST would be 61.18% of the budget estimate.
▪For March 2020, assuming about 10 days of total production loss and decreased economic activity
from the middle of March, we estimate the shortfall in value addition in the state to be roughly
₹29,000 crore.
▪Daily wage losses by self-employed and casual workers in Kerala for the lockdown study period is in
the range of ₹14,000 crore to ₹15,000 crore.

▪When it came to the shortfalls in Gross Value Added in the manufacturing sector from trade, hotels
and restaurants it has been estimated to be around ₹17,000 crore.

▪The total losses in agriculture sector, including plantation crops, are estimated at ₹1,570.75 crore.
The losses for agricultural labourers due to loss of wages is estimated at about ₹200.30 crore. The
total losses in the fisheries sector is estimated at ₹1,371 crore.
▪The study finds that the money-spinning Kerala tourism, which yields an annual income of ₹45,000
crore, will lose about ₹20,000 crore in 2020-21.

▪In the IT sector, the total decline in earnings is estimated to be ₹4,500 crore in the first three quarters of
2020-21.

▪It also expects a job loss of around 26,236, while 80,000 indirect job losses in services, transportation,
hotels, cleaning and security sectors is also foreseen.

▪The total loss in terms of remittances to the state in January-February 2020 is estimated to be ₹2,399.97
crore.
Special Economic Package:

▪ Considering the economic impact of the pandemic, a special package of ₹ 20,000 Cr was
announced for the State. It takes an inclusive view and ensures that no one is left behind.

▪ ₹ 2 months welfare pensions in advance

▪ ₹ 1320 Cr for providing ₹1000 assistance to families not eligible for welfare pensions.
▪ ₹ 100 Cr for free food grains to families in need.
▪ ₹ 50 Cr for Subsidized meals at ₹20
▪ ₹ 500 Cr health package
▪ Loans worth ₹ 2000 Cr through Kudumbasree
▪ ₹ 2000 Cr for the employment guarantee programme
▪ State government will clear arrears by April; it will amount to ₹ 14,000 Cr.
▪ Fitness charge relaxation for Autos, Taxis
▪ Tax relief for passenger vehicles
▪ Relaxation in bill payment deadline for electricity- water utilities.
▪ Entertainment taxes reduced for cinema halls.
EDUCATION
▪There were 12,981 schools in Kerala in 2016-17; 4,695 (36.17 per cent) government schools,
7,220 (55.62 per cent) aided schools and 1,066 (8.2 per cent) unaided schools. More
government schools are functioning in lower primary section than upper primary or high
school sections. Aided schools outnumber government schools in all sections.

▪There are 1,436 schools in the State which are offering syllabi other than the one prescribed by
the State Government. These include 1229 CBSE schools, 157 ICSE schools, 36 Kendriya
Vidyalaya and 14 Jawahar Navodayas. One Jawahar Navodaya Vidyalaya school each is
functioning in all the districts.
MANAGEMENT WISE NUMBER OF SCHOOLS IN KERALA (2016-17)

8000

7000

6000

5000

4000

3000

2000

1000

0
HIGH SCHOOL UP SCHOOL LP SCHOOL Category 4
GOVT PVT AIDED PVT UNAIDED
▪Covid-19 pandemic-impacted higher education will be different mainly in the mode of teaching and
evaluation. Online mode, formerly allowed only in open universities and varsities graded 3.5 onwards,
is now licensed for all universities to run their UG and PG programmes accordingly. There is the UGC
platform called SWAYAM offering several open online courses.
▪ The Kerala government launched virtual classes through KITE Victers channel under the name ‘First
Bell’. Under the supervision of Director of General Education, SCERT, Samagra Shiksha Kerala and
SIET (State Institute of Education Technology) prepared the modules for the classes. SCERT would
monitor the implementation, with the technical coordination of KITE. The sessions are scheduled
from 9 .30 am to 5.30 pm, Monday to Friday for all classes from 1 to 10 and 12th, on this channel.
▪ After two weeks of trial virtual classes, the Department of Education, Kerala decided to extend
the ‘First Bell’ scheme from June 15, 2020. Based on feedback and suggestions, they made
certain modifications in the system and the government issued an order on June 12 for the
second phase of the scheme. In the initial stage, it was identified that 2.6 lakh students did not
have access to the virtual class.

▪ The government took immediate steps for this, before the commencement of classes and by
May 31, 2020, the number had decreased to 1.15 lakh. Local self-governing institutions,
libraries, Akshaya centres, community centres, MGLC, BRC, Anganwadis, Kudumbasree and so
on started Ayalpakka Padhanakendrangal. Further, the number decreased to 17,774 by 11th
June.

• The Samagra Shiksha Kerala estimates that about 2.6 lakh to 3 lakh of the total 43 lakh school
students in the state do not have access to TV with cable connection, telephones or computer
systems with internet.
AGRICULTURE
▪ Kerala's agriculture sector suffered an estimated loss of Rs 1,570.75 crore over the last two
months owing to the Covid-19 pandemic and subsequent lockdown, according to a
detailed analysis covering all types of crops, including cash crops, carried out by the state
planning board (KSPB).

▪ The losses for agricultural labourers due to loss of wages were estimated at Rs 200.30
crore.

▪ There is a total loss of Rs 1,371 crore in the fisheries sector and Rs 181 crore in the animal
husbandry sector in the state during the months of March and April.

▪ In the marine sector 1,15,668 fish worker families were affected by lockdown. by the
lockdown. Besides, 23,881 families in the marine fisheries-allied sectors engaged in
activities like fish vending, peeling, cutting and harbor related works and 23848 fisherfolk
families and 766 worker families in the inland fisheries sector were also affected.
▪ Among the industries which suffered losses in this sector during lockdown includes
Plantation Corporation Of Kerala (6.9crore), Horticorp (1crore), Kerala Agro Industries
Corporation (0.85 crore), Kerala Agro Machinery Corporation Ltd (1 crore), Kerala Feed
Ltd (14.7crore), Kerala Poultry Development Corporation (1.08 crore), Kerala Life stock
Development Board (1.43 crore).

▪ An infusion of Rs. 3,860 crore will be provided to the entire agricultural sector in the
state, in a period of just one year. Anticipated expenses are to the tune of Rs. 1,449 crore
for agriculture, Rs. 2,078 crore for fisheries, Rs. 215 crore for dairy development and Rs.
115 crore for animal husbandry.
HEALTH
▪Five months on since the country’s first positive case of Novel Coronavirus Disease (COVID-19)
was reported in Kerala, the state with over a population of 35 million, has reported 4189 cases
of COVID-19 as on 30 June 2020 and 23 deaths with an impressive recovery rate of 51.7%.

▪The government instituted a longer quarantine of 28 days initially and built thousands of
shelters for migrant workers stranded by the nationwide shutdown. As on 29 June 2020, 180
617 people are under surveillance out of which, 177 955 are under home and institutional
quarantine, and 2662 are in designated isolation facilities.

▪By mid March the state announced a revival package of Rs 20,000 crore for health packages,
free food-grains, subsidized meals, loan assistance, welfare pensions, tax relief and arrear
clearances.
▪ The state has further decided to recruit 235,000 people from between the ages of 22 and 40
as volunteers, through online registration, to support its COVID-19 action plan

▪ The state’s action plan has also focused on strengthening and managing human resources.
on 26 March, “appointment has been given to 276 doctors, who were in the rank list of the
Kerala Public Service Commission.

▪ To ensure food and social security during the 21-day lockdown period, the government
opened 4,503 relief camps for migrant workers, set up 500 community kitchens across the
state, and provided doorstep delivery of food and essentials.

▪ There are reportedly 14 medical colleges, 18 general hospitals, 18 district hospitals, 46

taluk headquarters hospitals, 40 taluk hospitals, 114 24 7 public health centres (PHC),
568 public health centres and 170 PHCs for family health centres (FHC) run by the
Government of Kerala. Two thousand sixty-two private hospitals are also active in the state.

▪ There are about 38,004 and 61,223 beds, 1900 and 3061 ICU beds and 950 and 1531
ventilators in government and private hospitals respectively.
BREAK THE CHAIN
As Kerala prepares for post lockdown phase, the state has decided to come up with a unique
awareness campaign to prepare its masses for the new normal in times of COVID-19. The state
has inaugurated ‘Break The Chain’ campaign, where cartoons characters will be used to convey
important social messages like wash hands regularly using soap or sanitizer, wear masks and
continue to keep social distancing.

Health Minister KK Shailaja who flagged off this campaign in the state on May 21 talked about
the motive of the campaign . Under this campaign, the Pinarayi Vijayan-led government has
installed water taps at public spots such as at the entry and exit gates of the railway stations
with hand wash bottles.
TOURISM
▪The Kerala tourism industry, which has managed to bounce back last year after the Kerala flood
recording the highest growth rate in tourism arrivals in 24 years, is now starting to bleak future
owing to COVID-19 global pandemic.

▪Kerala registered 17.2% overall growth in tourist arrivals (8.5% growth in foreign tourist
arrivals and 17.8% growth in domestic tourist arrivals) in 2019.

▪As far as Kerala is concerned 10% of the GDP is from tourism and here we are seeing an
unprecedented close down, the likes of which we have never seen before. If last year the total
revenue of Kerala tourism was Rs 45,000 crore, this year the expectation was around Rs 50,000
crore. Right away we will lose some Rs 25,000 crore in revenue.
• Lakhs of domestic tourists who flock to Alappuzha and Kumarakom every year to sail across the
pristine beauty of the backwaters, which is famously called the ‘Venice of the East’. But since the
middle of February the waters here have been still as more than 1300 houseboats have been
anchored without work.

▪ Munnar is a deserted town today with only a few fruit vendors and shops selling essential items.
All the resorts in Munnar, both big and small, running into hundreds have been shut with just the
security staff staying behind . While last March saw 65% occupancy in rooms, which in itself was
less owing to the floods of 2018, the first week of this March it again dwindled to a dismal 25%.
EMPLOYMENT
Employment in Organized sector in Kerala
DISTRIBUTION OF WORKERS BY INDUSTRIAL CATEGORY 2017-18 (%)
Broad industry division Rural Urban Rural + Urban

Primary 27.01 11.03 20.11

Secondary 30.38 31.96 31.07

Tertiary 42.59 57.03 48.82

Total 100 100 100

▪ As per NSO survey 2017-18 the total workers (employment) in Kerala in primary
sector was 20.11%, secondary sector 31.07% and tertiary sector 48.82% . . In rural
area primary sector account for 27 percent. The share of secondary workers was
30.38 percent and tertiary 42.59 percent. On the other hand in urban area, the
share of primary workers are much lower and the share of tertiary workers are
much larger.

▪ The lockdown has resulted in huge loss of employment of all categories – self-
employed, regular and casual labours. According to our estimate total loss of
employment in manufacturing and construction was more than 50 percent. In
tertiary sector, the sub sectors which registered more than 50% loss of employment
were trade; repair of motor vehicles; transportation and storage; accommodation 14
and food services; financial and insurance; education; arts; entertainment and
recreation and other services.
Loss of employment due to 69 days of lockdown

INDUSTRIAL TOTAL LOSS OF EMPLOYMENT

CATEGORY WORKERS(%) (MORE THAN 50% )

TOTAL PRIMARY SECTOR 20.11

Manufacturing 11.31 ✓

Construction 19.11 ✓

TOTAL SECONDARY 31.07 ✓

SECTOR
TOTAL TERTIARY SECTOR 48.82 ✓
Trade, repair of motor vehicles 14.02 ✓
Transportation and storage 9.21 ✓
Accommodation and Food service 2.74 ✓
Information and communication 1.47
Financial and insurance 2.97 ✓
Administrative and support service 1.68
Public administration and defence 2.11
Education 4.96 ✓
Human health and social work 3.46
Arts, entertainment and 0.60 ✓
recreation
Other services 2.70 ✓
TOTAL 100 ✓
CONCLUSION
▪Kerala was the first State in the country to report a novel corona virus incident. The first wave
of COVID19 outbreak reached Kerala in the last week of January. The State Government
responded swiftly to the situation. Kerala has successfully prevented local and community
transmission then. This is not a small achievement.

▪The measures that the State Government have taken include social distancing, home isolation,
contact tracing, screenings at State borders and awareness raising at local community level.
These efforts have helped us to control the spread to a very large extent. The Government is
taking no chances here and is closely monitoring the situation.