COVID-19 set to hit State's economy hard

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COVID-19 set to hit State's economy hard

Thursday, 09 April 2020 | TATHYA | BHUBANESWAR

As the Corona virus disease (COVID-19) continues to wreak havoc on markets across the world, the pandemic will no doubt have a huge adverse impact on the economy of Odisha in days to come.

The virus is all set to break the backbone of a number of sectors that bring core revenue to the State and thereby push Odisha further into economic doldrums.

Even when the State administration is facing a tough time in fighting the virus, the battle on the economic front is going to be tougher, feel experts.

From agriculture, mining and tourism to exports, entertainment, electronics and information technology – all these revenue-yielding sectors have been crippled by the outbreak.

While the 24 days’ lockdown the State has faced since March 21 has literally shut down all forms of trade and commerce, the long term implication of the lockdown and the unpredictable time frame of the virus will hurt the entire economy, experts opined.

The aim of the State administration has been to flatten the curve of the COVID-19, but the impact on the economy may perhaps go beyond the State’s mitigation efforts.

Mining, tourism and exports sectors are near ‘zero’ at the moment and with markets closed local small businesses will be hit really hard in the coming days and months. All are waiting to see the real impacts on a range of sectors in the next few months.

At the moment one can only predict, and the predictions are really bad. Experts expect any sort of revival in any sector may take at least 12 to 18 months post-Corona control.

Mining sector used to be the largest contributor to the State exchequer and now with 23 major iron ore manganese mines gone to new hands, it will take at least one year for resumption of mining operations.

Second, though mining activities are kept out of the purview of lockdown, non-availability of manpower has almost stalled operations.

“Hospitality industry has been devastated completely. While Corona virus has brought this sector to a standstill position, there is no hope that tourism will revive anytime soon, simply because even after everything settles down, people are not going to travel anytime soon,” said a leading tour operator.

With big hotels across the State including the ones owned by the Odisha Tourism Development Corporation (OTDC), a State-owned PSU pulling down shutters, the condition of the smaller hotels is obvious.

FICCI Eastern Region Tourism Committee Chairman Souvagya Mohapatra said, “We have asked the State Government to bail out the industry. Hopefully, we will see something coming up.”

Agriculture, which is the mainstay of Odisha, is badly hurt. Rabi crop harvest has come to a standstill due to non availability of workers. Allied sectors are also facing the toughest time. Take for example, every day 30 lakh litres of milk are wasted and milk farmers are in dire straits.

Similarly, fisheries sector is facing a tough time and worse is the situation of the sea food exports. Odisha is one of the major seafood exporters in the country but since Corona virus has hit the State the fishermen have hardly gone out for fishing, forget exporting the catch.

There is hardly any fishing happening now. But more than that, all our markets have been hit terribly. The US, China, Europe and Japan are the core markets, where Odisha used to send mainly shrimps. Corona has shut down everything.

Official stats say that seafood exports from the country and shrimp export to China alone had touched a record growth of 42 percent in 2019. But COVID-19 has turned everything upside down, said a senior official of Falcon Exports, which is the biggest exporter of sea food from Odisha.

COVID-19 simply does not seem to spare anyone. Another big sector that has taken a hit is Electronics and Information Technology (E andIT).

While most of the big companies like Infosys, TCS, and other IT companies in Odisha have given permission to their employees to work from home, a model which would help the companies cut costs, the sector will face a serious crisis in coming days, admitted experts.

With the State Government shutting down bars and beverage outlets, the other big revenue generating arm of Odisha Excise, which generates over Rs 4,000 crore per annum, it will not be able to boost the State exchequer.

Against this backdrop, the State Government’s task of generating revenue and funding social sectors like healthcare and livelihood has turned out to be a Herculean task. Major funding will go for COVID control and other healthcare measures.

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