COVID impact on state economy; '27 lakh more youths to be unemployed'

* SITA report tabled in Assembly

STAFF REPORTER

GUWAHATI: Over 27 lakh youths in Assam will become unemployed due to the economic conditions in the aftermath of COVID-19 and the consequent prolonged lockdown. This will result in the increase of unemployment rate of the State to 16 to 27 per cent from the present rate eight per cent. Consequently, the poverty rate may go up to about 50 percent in the State.

The dismal unemployment scenario has been predicted by the State Innovation & Transformation Aayog (SITA) in its report on economy of Assam in the backdrop of COVID-19 pandemic. The report prepared by SITA in collaboration with OKD Institute of Social Change and Development, Guwahati and ICSSR New Delhi was laid in the Assam Assembly during the first day of the ongoing monsoon session on Monday.

Owing to COVID-19, it is estimated that the livelihoods of 67 lakh people will face disruptions. According to the report, the categories of casual labourers and self-employed people are expected to face severe stress and hardship.

The report has also predicted that due to large-scale return of migrant people to the State following COVID-19, there will be a significant fall in the inflow remittances to the State; a part of which (around 16 per cent) is used for agricultural investment. Consequently, it is estimated that there will be a drop in the agricultural investment in the coming season by 10 to 25 per cent which is equivalent to Rs 786 to Rs 1,572 crore.

On other hand, the State is set to lose revenue to the tune of Rs 12,423 to Rs 18,236 crore in the current fiscal (2020-21). The worst or the best case scenarios of growth in the country in general and the State in particular would depend on the loss of such a huge amount of revenue, the report added.

"COVID-19 is expected to lower the growth rate of the State's economy by 1.3 to 5.2 per cent in the current fiscal (2020-21). This suggests a potential loss in the Growth State Domestic Product (GSDP) worth Rs 3,219 to 12,877 crore at 2011-12 prices. The loss is equivalent to Rs 4,442 to Rs 17,770 crore at the current prices," the report added.

The report further said that the Plantation and Tea sector is estimated to incur losses worth Rs 1,200 crore to Rs 1,500 crore with the Smallholding sector accounting for Rs 500 to Rs 800 crore. Similarly, rubber plantation is estimated to face a loss of Rs 6.5 crore.

The impact of COVID-19 and the lockdown is found more prominent among the MSMEs sectors. This sector is expected to face acute capital shortages, severe demand decline and logistic barriers compelling many to go bankrupt and eventually resulting in closure.

The Handloom sector in the State employs about 20 lakh weavers of whom the majority is constituted by women. This sector has also been badly hit by COVID and lockdown. It is expected to incur losses of Rs 156.6 crore in the current fiscal.

In its policy recommendations, the SITA said that there is an inherent urgency for overcoming the challenges presented by the present situation. Therefore, a series of very-short term (to be done within a month), short term (to be done within three months) and medium term (to be done within six months) measures will be necessary. The policies need to have a judicious mix of the three.

In case of relief measures, the SITA has recommended that the households/families below the poverty line should be given a cash transfer of Rs 3,000 per household/family per month for at least three months (assuming a recovery in the State's economy within three months after timely interventions as suggested) as special COVID-19 relief, in addition to the all existing benefits provided to them. Therefore, this will require an estimated amount of Rs 2250 crore.

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