Over the weeks Kerala faced one of the most devastating floods in which hundreds of people died with thousands being injured. The hilly districts of Wayanad and Idukki were affected the most. The economic implications of this unprecedented flood are going to be serious and state finances and economy will be hit in many ways. The material damage of public and private property in the state is hard to estimate but there are some major problems which the state will face in the coming days.
Kerala is a consumption-led state, unlike Gujarat or Maharashtra for whom exports constitute a significant part of GDP and state revenue. The majority of revenue of Kerala comes through taxes on consumption. Now affected by the recent floods, the consumptions will be lower and therefore GDP growth and revenue will go down. The infrastructure of the state has been badly hit due to floods with several roads and bridges severely damaged. The economic activities of people will be affected until the roads and bridges are reconstructed. Education is a major part of any state’s economy and is responsible for its healthy service sector but since the schools and colleges have been converted into relief camps they will be closed for some time. Agricultural products of the state such as rice, rubber, tea, and spices have been hit due to the floods. The earnings of the state through tourism will also be affected, although the southern tourist destinations like Thiruvananthapuram and Nilgiris are safe but the floods have created a fear psychosis due to which people will not even visit to safer places. The tourist destinations of Idukki, Wayanad, Kottayam are destroyed, tourism accounts for 10 percent of state GDP so it will be a major loss. So, overall the state is hit badly but can the recent flood be declared a National disaster or not, it is questionable.
Disaster Management Act, 2005 does not have any provisions to declare any calamity as national disaster or state level disaster or local disaster. “There is no provision to declare any calamity as a national calamity. None of the calamities were declared as national by the Congress when it was in power from 2004-14″, said union minister K Alphons. The government defines disasters and provides relief funds on completely different measures. The other big calamities like Uttarakhand floods, Gujarat earthquake and the 1999 super cyclone in Odisha were declared “a calamity of unprecedented severity”. If a calamity is declared as “rare severity”/”severe nature”, the central government provides relief fund to state and also considers additional assistance from NDRF. A Calamity Relief Fund (CRF) is set up, with the corpus shared 3:1 between Centre and state. When resources in the CRF are inadequate, additional assistance is considered from the National Calamity Contingency Fund (NCCF), funded 100% by the Centre.
The central government has granted a relief fund of Rs 600 crores to Kerala flood victims. The central government has repeatedly said that there are no provisions of declaring any disaster as a national calamity, so there is no question of making any such declaration. The entire cry by the state Congress leaders in Kerala and Rahul Gandhi is either ignorance or intentional mischief. The state government and the central government should make coordinated efforts to minimize the loss and rebuild the state rather than blaming things on each other.