The steep fall in oil prices and COVID-19-induced job losses in the Gulf will see remittances by non-resident Keralites (NoRKs) dip by at least 15% in 2020. The real property development and retail sectors in the State are set to take the biggest hit as income levels fall and hundreds of thousands of the jobless return home.
It was expected that NRI remittances will hover around ₹1 lakh crore in 2020. But the oil debacle and COVID-19 will bring down the income, especially from Gulf countries, by 10 to 15%. The loss in rupee terms is likely to be between ₹10,000 crore and ₹15,000 crore, said S. Irudaya Rajan of the Centre for Development Studies in Thiruvananthapuram on Wednesday.
The Kerala State Planning Board’s rapid survey of the impact of COVID-19 on the State economy says estimates are available for two months, January and February 2020, and that the fall in remittances is likely to be higher than the estimates.
The average monthly remittances through private receipts to the State in 2019-20 were ₹8,023 crore and a reduction of 28.19% of private transfers is seen from January to February. There is a reduction of ₹138 crore in bank deposits in January and February 2020. The total dip in remittances to the State during the first two months of 2020 is ₹2,399.97 crore.
Martin Patrick, an economist in Kochi, says the retail sector will be the hardest hit with people trying to reduce consumption to adjust to the lower income levels. Sanjeev Kumar, a financial consultant in Kochi agrees. Retail as well as real estate will sway under the impact as the Non-Resident Indian community constitutes a big support to property development in Kerala, he says.
Dr. Rajan says a clearer picture on the return of Keralites will emerge after December. Most of those who have already come home comprise family members, including children and spouses, of the job-seeking or employed emigrants.
Those who can cling on to their jobs in these adverse times will stay put in their place of work because Kerala is no more a safe haven from COVID-19 unlike earlier in the year when Kerala appeared a safer place. The earlier perception had induced many to rush to the safety of their homes.
Dr. Rajan, whose area of research includes migration, estimates that around 2.5 million Keralites work in the Gulf and three to five lakh of them will return home. According to numbers from the Department of Non-Resident Keralites Affairs, of the 4.66 lakh people who have registered with the department for returning home, more than three lakh of them are from the United Arab Emirates and Saudi Arabia.
The department estimates that there are 40 lakh Malayalis work in foreign countries while another 13.70 lakh work outside the State within India.
