Ahmedabad: Vicious floods, a devastating earthquake and bloody communal riots. And now state assembly elections yet another blow to the ailing Gujarat economy. As the states once-vibrant economy limbs back to normalcy after the recent riots, one of the worst in the recent times, here comes the state Bharatiya Janata Party (BJP) governments recommendation to dissolve the state council of ministers, paving the way for early elections in Gujarat.

With this, the hope of some imminent government policies aimed at getting the states economy back on the rails has been blown off. The governor dissolved the assembly nine months ahead of its term and asked Chief Minister Narendra Modi to continue as caretaker chief minister till the next government is sworn in. Modi has asked the Central Election Commission (CEC) to call for elections at the earliest.

This means that the care-taking government will not be in any position to announce major economic policy measures as the code of conduct prescribed by the CEC prohibits such practices. The riot communal riots had already rocked the business and economy of the state.

The Godhra carnage cost Gujarat around Rs 10,938 crore in terms of production, sales and revenue generation. This is expected to further decelerate the states rate of industrial, commercial and overall economic growth. The riots dealt a big blow to several industries and trades, and self-employment. They have also taken their pound of flesh from the state government Gujarat has suffered Rs 700-crore revenue loss.

The Gujarat Chamber of Commerce and Industry has estimated that the trade loss totalled Rs 7,280 crore, production loss Rs 2,258 crore, loss to the self-employed amounted to Rs 700 crore and the loss to the state government was another Rs 700 crore. The state has also lost Rs 20 crore in daily income from sales tax, octroi and other taxes. Multiply this by 35 days and you have the magic figure of Rs 700 crore.

This has come at a time when the state is grappling with a Rs 701-crore budget deficit, which would further dent the states ability to finance developmental works. All this has happened after a devastating earthquake last year, which caused massive loss of life and property, leaving over 20,000 persons dead and 1,67,000 injured.

Nearly a million families were rendered homeless while the quake destroyed much of the areas social infrastructure, ranging from schools and village, health clinics to water supply systems, and communications to power.

The World Bank and the Asian Development Bank have estimated that reconstruction work in the quake-ravaged state will cost around Rs 10,600 crore. In their joint Gujarat Earthquake Recovery Programme Assessment Report, presented to the governments of Gujarat and India, the two multilateral banks have put the total loss of assets, including private assets, at Rs 9,900 crore ($2.1 billion).

Bulk of these losses are in the housing sector (Rs 5,200 crore [$1.1billion]). Among the other severely affected sectors are education, health, rural water supply, irrigation, transport, and public buildings and monuments. The total impact is expected to be Rs 10,100 crore ($2.2 billion) over the next three years. With elections round the corner, the state machinery would not be in a position to deal with the much-needed efforts to rebuild the state.

The riots following the Godara carnage have had done irreparable damage to the business confidence among foreign and domestic businessmen. Foreign contracts worth several million pounds with Gujarat-based companies are no longer likely to happen any time soon. There is a big problem. We find people not wanting to buy from Gujarati companies now, after the riots, because they are worried shipments could stop, a businessman said.

The latest political gimmick by the BJP-led government has only tilted the scales against Gujarat further.