Economist calls for structural reforms

Rudra Sensarma

Rudra Sensarma  

Government package sought for agriculture, MSMEs

Kerala should bring in structural reforms such as introducing more business friendly policies, bettering connectivity and infrastructure, lowering red tape and controlling militant trade unions to fast-track the economy post-lockdown, Rudra Sensarma, Dean (Research, Innovation and Internationalisation) and Professor of Economics, Indian Institute of Management, Kozhikode, has said.

Prof. Sensarma told The Hindu that “Kerala is facing a severe financial crisis, but it is temporary. The government has to borrow additional funds to comfortably service the debt if the economy gets back on track by next year. Once the pandemic is over, the economy will certainly recover but what will be important is fundamental changes need to be made to the State’s economic activities.”

He said the government must now come up with a package for the agriculture sector and the micro, small, and medium enterprises (MSMEs) that employ the majority of the workforce. The services economy which included travel and tourism would take the longest time to recover and hence would require separate attention.

The return of Gulf expatriates would not affect the existing workforce but the real loss would be of remittances as one-third of Kerala’s GDP depended on it. “The crisis should nudge the government to re-imagine the economic model of the State that is highly dependent on inflow of money from the Gulf and inflow of workers from other States,” Prof. Sensarma said.

While manufacturing is not a major option in a State with scattered land parcels, he said that the government should give a big thrust to the food sector including agriculture, dairy, poultry, and food processing. Also, technology sectors such as IT, Fintech and digital services could productively engage Kerala’s educated and talented youth.

Prof. Sensarma expressed the hope that the Gulf returnees would replace the immigrant workers who are returning to their own States. “The guest workers from northern States were mostly unskilled and semi-skilled while many of the Gulf returnees have the experience and skills in technical fields like accounting, IT, or general managerial and supervisory work.

Some of the Gulf returnees may not mind taking up agriculture as an occupation as this was one of the areas that had been severely hit not only by the leaving of guest workers but also by the supply disruptions from other States. “The skilled workers will enhance the talent pool for local employers, even if temporarily. Those who have the passion and some capital may even take to entrepreneurship,” he said.

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Printable version | Jul 8, 2020 6:47:05 AM | https://www.thehindu.com/news/cities/kozhikode/economist-calls-for-structural-reforms/article31957176.ece

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