A difficult fiscal scenario faces the State: Governor’s address

Though Kerala is facing hardships in the economic front due to the severe adverse impact of the pandemic, the Governor Arif Mohammed Khan has said it is highly gratifying to tell the world at large that the Government has lived up to its promise that no one shall go hungry during the lockdown period.

Addressing the 22nd session of the 14th Kerala Assembly on Friday, the Governor said this was made possible with the active participation of Local Self Governments and Community Volunteers. Community Kitchens were opened to provide food to the needy and it was ensured that Guest Workers got food of their choice.

COVID-19 has considerably impeded the normal social life in the State. All countries in the world are facing the challenges posed by the pandemic in differing degrees. “Kerala has almost 9% of its population living abroad. The impact of the pandemic has been quite severe on the State economy. Kerala receives remittances from abroad to the tune of 12 per cent of its Gross State Domestic Product (GSDP). The coming back of around 6 lakh emigrants will hamper the flow of remittances and this will dampen the robust private consumption expenditure in the State”, he said.

The Governor said a direct consequence of this is a downward slide in the economic growth of the State. Expert Committee has estimated the loss in GSDP for financial year 2020-21 at a phenomenal figure of ₹80,000 crore which is about 10% of the GSDP.

The deep dent faced by the economy is bound to adversely affect the revenues at various levels. Kerala will face the double whammy of lower own tax revenue collections and reduction in devolution of Central taxes due to the economic down turn resulting from the pandemic. Along with reduced revenue inflows the expenditure burden has also gone up.

The Governor said the Government has been taking proactive steps to mitigate the rigours of the COVID-19 pandemic and revive the various sectors of the economy. “ We are determined to revitalise our economy and make sure that adequate employment opportunities are generated for our people including persons who have been compelled to return from abroad leaving their jobs”, he said.

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