Kochi: The general strike by the government employees and teachers in Kerala, which has entered the tenth day on 16 February, has already hit the states economy. The strike has paralysed Keralas trade and business.
Since most economic activities are directly or indirectly linked to the government, the impact of the strike is quite heavy. Already reeling from a slump in business following the drastic fall in agricultural produce prices, the strike, which thinned the flow of money into the economy apart from slowing down or crippling economic activities, has caused serious damage to the beleaguered Kerala economy.
From roadside teashops to drugstores, and from bus companies to banks, the strike has affected each and every business sector. But it is the shopkeepers and small traders who have been hit the most. Tea-vendors, those running photocopying facilities and typists sections who rely mostly on government offices in their vicinity for survival are among those who have been directly affected.
Not just business and trade, several service sectors too have been hit. A pharmacist in an inner city of Ernakulam district says his medical shop, which used to have a daily sale of between Rs 1,500 and Rs 2,000, now has a business in the range of Rs 1,000 to Rs 1,200.
Another area that has been badly affected is the real estate sector. The sector, which was consistently on the downswing from the second half of the 1990s, had found a short-lived glimmer of hope when the United Democratic Front (UDF) government came to power. This was due to the general belief that the UDF rule is always good for the real estate sector.
But the marginal upswing did not last long and the sector was back to gloomy days. The general downturn in the economy as well as the continuing crisis in the agricultural sector due to the steep fall in realty prices could not sustain the hope.
The UDF governments belt-tightening measures affected the real estate sector badly. A sizeable section of the real estate customers are from the salaried class, particularly the state government employees. A real estate insider says those intending to build houses in the Rs 5-10-lakh-range were mainly the government staff. As for flats, the government employees generally preferred the below-Rs 8-lakh ones.
The state governments decision last month not to advance housing loans to its staff for the next two years which is one of the reasons why the government staff have now gone on strike has been a major setback to the real estate sector. The low-cost, long-term government housing loans was a big relief for the employees intending to build houses or buy flats, though procedural tangles often used to delay the loans.
The strike has now put on hold all paperwork related to the transfer of ownership, registration, grant of building permits and a whole lot of real estate activities involving government offices. This has not only paralysed business but also dipped the prices.
The general feeling that the strike would go on indefinitely and that the government may not yield to the unions demands is contributing the slide in prices, says a real-estate agent. "Those intending to purchase houses are now holding on, expecting a further fall in prices."
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