Restrictions won’t have severe impact on Karnataka’s economy this time

Picture used for representational purpose only

Bengaluru: Experts believe that the lockdown imposed due to the second wave of Covid-19 may not have an impact on Karnataka’s economy as expected.

Experts are of the view that revenue loss to the state exchequer and economic sectors will be far lower than that which arose from last year’s lockdown. S Sampathraman, president of All India Manufacturers Organisation, Karnataka, said, “The lockdown during the first wave was nationwide and for more days, spanning from mid-March to early October. The present lockdown is not only localised but also shorter. It began towards the end of April and we expect the government to start the unlock process from June 14. So, losses will be relatively less.”

Highlighting the fall of gross state domestic product from Rs 18 lakh crore to Rs 16.6 lakh crore last year, Sampathraman estimated the aggregate loss of the industrial sector at Rs 23,000 crore during the first lockdown. He said, “The estimate is based on the contribution of the industrial sector to GSDP (17%). This time, we estimate the loss to be 40% of last year’s loss.”

TR Parasuraman, president of Bangalore Chamber of Industry and Commerce said revenue losses suffered by the merchandise exports sector due to the second lockdown is nearly Rs 9,000 crore compared to Rs 27,000 crore last year.

He said that the turnover of the sector fell from Rs 1,24,000 crore in 2019-20 to Rs 97,000 crore in 2020-21. He added that this year the loss is limited as the restrictions lasted for only a month and were relaxed from June 2.

Parasuraman is also the president of Toyota Industries Motors. He said that Toyota India which could not produce 4,200 engines in May is now all set to export nearly 2,000 engines in June and more in July.

Commercial taxes collection that had reached a record high of Rs 10,289 crore in March fell to Rs 4,304 crore in April when the lockdown was partial. It further decreased to around Rs 2,000 crore.

BT Manohar, the taxation committee chairman, Federation of Karnataka Chambers of Commerce and Industries said, “Revenue flowed from essential goods, pharma and FMCG during the current lockdown as they were open for limited hours.”

The excise department earned Rs 2,205 crore in April 2021 as compared to Rs 1 crore last year. However, revenue from stamps and registration city and motor vehicle taxes has been less this May as the departments only earned Rs 43 crore and Rs 44 crore respectively. The target was Rd 700 crore and Rs 560 crore.