India File

After the deluge

Vinson Kurian V. Sajeev Kumar | Updated on August 27, 2018 Published on August 27, 2018

Plantation, tourism and real estate in Kerala have been affected. Recovery efforts are about funds, inclusiveness and sustainability. BusinessLine reports

For Hasanul Banna, a 30-year-old garment business outlet owner, living in his own house was fulfilling a dream. He purchased a six-cent plot at HMT Junction in suburban Kalamassery (Kochi) and constructed a 900 sq ft, two-bedroom house at a cost of ₹22 lakh, managing with his own funds and a private financier at 14 per cent interest.

His family was preparing for the house-warming in the first week of September. But flood waters washed away his plans. “My wife broke down when she saw the condition of our hard-earned property. But I consoled her as our loss was nothing compared to the trauma of others who had lost all their belongings”, he says. He expects renovation and repair to cost ₹3-4 lakh.

Real estate impact

Ironically, construction is expected to act as a key driver of a ravaged economy. Credai, Kerala, believes that the emerging situation has only put a “temporary pause” on demand, especially in Kochi. Around one lakh dwellings both in commercial and residential segments have to be restored. Of this, half would be in and around Ernakulam district considering its density, says Najeeb Zackariah, President, Credai, Kerala. “But our real concern is the shortage being faced by the sector in the coming days, especially in labour, and materials supply like cement and steel, which would affect renovation activities”, he said.

However, L Gopakumar, Vice Chairman of the Indian Institute of Architects, Kerala Chapter, believes that the demand for water-front properties, favoured by the rich will diminish. “The devastating floods have pulled back the prospects of real estate markets, which were limping back after demonetisaton. Fear and anxiety will dissuade people from investing in Kerala”, he said. The situation may continue for at least a year, he believes. The prices are likely to crash in the short term.

 

 

The economic impact, notwithstanding the ₹20,000 crore loss estimated by the State government, is considerable. Wage loss in the month of August alone would be to the tune of ₹4,000 crore as the floods have displaced over 33 lakh workers in Idukki, Ernakulam, Alappuzha and Kottayam.

Kerala, an economy underpinned by construction, plantations and tourism (see box), is likely to face labour shortage owing to the sudden outflow of migrant labourers from the North East. Thousands have lost their jobs in construction, plantations, rice mills, factories and fish processing units. Footloose workers were the worst hit, says Benoy Peter of the Centre for Migration and Inclusive Development.

The State’s animal husbandry and dairying has suffered an estimated loss of around ₹800 crore. Roughly one lakh each of milch cattle, goats, pigs and more than four lakh of poultry were lost, says TP Sethumadhavan, former Director of Entrepreneurship, Kerala Veterinary and Animal Sciences University. Tourism is estimated to have suffered a loss of ₹500 crore due to damages and loss of business. There have been large scale cancellations of bookings for ‘monsoon tourism’ and Onam festivities.

In Kodagu

Kodagu, the country’s coffee heartland, has been ravaged as well. Incessant rains triggered landslides and wreaked havoc, wiping out several villages and coffee estates. An estimated 5,000 acres of plantations have been devastated, planters say. The Kodagu Planters’ Association wants the Ministry of Environment and Forests to take over landslide-affected lands adjoining forests and compensate coffee growers.

Boje Gowda, Coffee Board Chairman, has said an assessment of damages suffered by coffee growers is in progress. The Karnataka Planters’ Association has pegged crop losses at around ₹2,000 crore.

Meanwhile, the 4,500-5,000 homestays in Kodagu, of which only about 500 conform to homestay guidelines and are registered are estimated to incur losses of about ₹45-50 crore. Says Viju John, proprietor of Misty Woods, a 22-room resort in Kakkabe, “We are hit very hard this August and will continue to incur losses as tourists will be wary of travelling to Kodagu.”

However, the excesses of tourism in Kodagu have not gone unnoticed. “Ours is a fragile hill ecology, which requires stringent building regulations. Kodagu attracted 18 lakh tourists last year, while the local population is just six lakh strong,” says CP Muthanna, President, Coorg Wildlife Society.

Question of finances

Finally, the larger issue is reorienting the very direction of the economy. Kerala Chief Minister Pinarayi Vijayan has said: “It’s not an issue of repairing roads or infrastructure work or in other ways tinkering with the economy. We need to rebuild the state wholesale into a New Kerala.” The question is whether a change in direction is really on the cards, given the centrality of construction and real estate in the development process.

There is also the more immediate issue of funds. The State expected as much as ₹42,193 crore as tax in 2017-18. However, it received only ₹38,407 crore. The ₹600 crore compensation from the Centre has not been enough to make up for the shortfall of ₹3,786 crore. From 2006 to 2012, its VAT revenue growth was around 20 per cent per annum. Since then, it has decelerated to 10 per cent. “We thought GST would provide a higher growth rate of 20 per cent. Now, the compensation component factors in at only 14 per cent,” says State Finance Minister Thomas Isaac.

Meanwhile, India’s best State in terms of public health facilities too faces a crisis as the floods recede. Oommen C Kurian, Fellow, Observer Research Foundation, says that the major risks the State faces include leptospirosis, and water-borne and mosquito-borne diseases.

Impact on dalits and adivasis

Like in any natural disaster, the dalits, adivasis and poor have been impacted the worst, according to Abhilash T, Assistant Professor, Centre for Development Studies, Thiruvananthapuram. Hailing from the tribal belt of Peerumedu in the flood-hit Idukki district, Abhilash says: “In terms of numbers and data, their losses may not count much, but considering the fact that most of them will have to rely solely on government aid to rebuild devastated houses and property and given the slow pace with which such funds flow in, they will have to wait for a long time till their life is sorted out,”. He says policy towards flood relief must prioritise such demands from marginalised sections. “That would be an egalitarian approach to post-disaster management,” he says.

With inputs from Vishwanath Kulkarni, Jinoy Jose P and Sangeetha Chengappa

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Published on August 27, 2018
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