Terming the demonetisation of high-value currency notes one of the most devastating catastrophes in India’s financial history, Governor P. Sathasivam told the Kerala Assembly on Thursday that heart-tending stories were coming in from various parts of the State even now on how farmers had to dump their crops and how small and marginal business and households had to give away at throwaway prices inventories built up over time.
“Around 200 deaths, including suicides, have been reported on account of exhaustion, delayed medical assistance and sheer helplessness...The entire cooperative structure, which is a major backbone of the agricultural economy of the State, was immobilised overnight...There has never before been any single other instance of expropriation of the purchasing power of a population of this magnitude. The biggest question that Kerala has to address is how long it will take for the cooperative banking system to be back on rails,” the Governor said in the course of his customary policy address to the House.
Besides the impact of demonetisation, the Governor listed the drought situation, the crisis in the cash crop sector, and the possible impact of return of Non-Resident Keralites (NoRKs) as areas of serious worry for the State government.
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Water level in major reservoirs was only 41 per cent of capacity and groundwater level in most parts of Kerala had been showing a drastic fall. As much as 31,116 hectares of cropped area had been damaged. With the possibility of recession hanging heavy, Kerala’s 10 lakh or so rubber growers were faced with an uncertain future.
A perceptible increase in the number of non-resident Keralites was evident and, if this trend continued, it would not only affect domestic consumption but also add to the number of educated and skilled unemployed and under-employed in the State. Further, after implementation of the Food Security Act, the universal public distribution system had been severely compromised with serious implications on price levels of essential food commodities, the Governor said.