Kerala's economy slides in FY 2020-21, posts -11.2% growth

The primary sector comprising farming and animal husbandry managed to withstand the pandemic onslaught to a certain extent. File Photo

Kochi: The COVID-19 pandemic that swept through the world had an adverse impact on Kerala's economy as well, with Kerala's Gross State Domestic Product (GSDP) showing a negative growth in the 2020-21 financial year.

According to Economics and Statistics Department estimates, the state's growth rate was -11.2%. The statistics also highlighted the importance of the tourism sector in Kerala's economy.

The negative growth has been attributed to the setback to the service sector, including tourism. The growth of domestic revenue, pegged at 6.2% in the 2018-19 financial year, slid to 2.2% in 2019-20. It further plunged to -11.2% in 2020-21, the lockdown year, according to quick estimates.

Kerala reported the country's first COVID-19 case on January 30, 2020, before going into a lockdown along with the rest of India in March.

The service sector, including tourism, commerce, hotels, restaurants, bars, etc., contribute up to 63.9% to the state economy. The tourism sector's contribution alone would come to Rs 45,000 crore, about 10% of the economy. The pandemic and the consequent lockdown dried up this revenue.

The small- and large-scale industrial sector, which contributes 26.2% of the revenue, too, was hit by COVID-19. The sector also went south and posted a negative growth.

The primary sector comprising farming and animal husbandry, however, managed to withstand the pandemic onslaught to a certain extent. The slide in the growth of the farm sector to -3% during the flood-hit 2018-19 financial year had further dipped to -6.2% in 2019-2020. The sector, however, clawed back up to -0.95 in the 2020-21 fiscal. The farming sector, however, comprises only 11% of the state's economy.

The final estimates of Kerala's economy will be officially announced in the Economic Survey, which will be released ahead of the state budget.

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