U’khand’s rural economy declines 79% due to pandemic

By Arun Pratap Singh
Dehradun, 7 Sep: According to research conducted by the State Bank of India, Uttarakhand’s rural economy has suffered a huge loss of Rs 28,000 crores till 31 August due to the Corona pandemic. According to the Ecowrap research paper published by the SBI, the rural economy suffered to the extent of 79 percent in the months of July and August due to the lockdown. This is a very high loss when compared to loss in the rural economy of many other states. The report has indicted several states of indulging in self imposed short lockdowns like weekend lockdowns, which according to the bank had a very undesirable impact on the economy.
On the other hand, in Uttarakhand, the urban economy suffered to the extent of 27 percent in these two months, which is relatively much lower.
It implies that urban commercial activities had resumed to a significant extent in the months of July and August and, therefore, as compared to the previous months of May and June, the urban economy had recovered to some extent. However, experts believe that unwarranted institutional quarantine requirements for people returning to their villages and for others have had a high adverse impact on the rural economy and to some extent on the urban economy. According to the report, the overall loss to the states in the period of lockdown is estimated to be around Rs 4 lakh crores. There is a significant shortfall in GST revenue, too, since most commercial activities remained badly affected in these two months. While several states have already begun the exercise to assess the fiscal deficit in the current year but Uttarakhand is yet to revise its estimates. While, as per the revised estimates, Himachal Pradesh is expected to have a fiscal deficit of over 7 percent as compared to the budgeted estimate of 4 percent. Uttarakhand is yet to revise its estimate as compared to the budgeted estimate of fiscal deficit of below 4 percent! The state is, in fact, waiting for the annual report of the state’s statistical department to come out with its estimates even as other states are already taking the Ecowrap report of the SBI seriously enough to plan measures to counter the falling GDP and revenue losses.
It is pertinent to point out here that a large population of migrants has returned to the state, including the rural areas, due to job losses in the cities during the pandemic. It is the state’s responsibility to arrange for their livelihood and the state government has made big claims in this regard. The impact of such measures announced by the government is so far not evident in this report. If the rural economy is not revived, large scale migration out of rural areas will become imminent in the months to come!