Pre-pandemic, markets across Kerala would be full of shoppers gearing up for Onam, the biggest festival in the state. Traders look forward to Onam as well, as it is a time when they see massive sales— but not anymore. While pre-Onam sales took a hit with the 2018 floods, now, thanks to the pandemic, traders and merchants are experiencing massive losses for the second consecutive year. According to a rough estimate by the Kerala Vyapara Vyavasya Samithi, a pan-Kerala traders’ organisation, the losses for all traders, including those not affiliated with the Samithi, amount to about Rs 10,000 crore in 2020 and 2021 each, across sectors.
“The estimate for the year 2020 shows that the loss was Rs 2,000 crore (for Samithi traders); this would be the same for this year too, or even worse,” ES Biju, state General Secretary of the Kerala Vyapara Vyavasya Samithi said. A total of 5,40,000 traders are associated with the organisation. “Going by this, the total loss for all the traders in the state would come around Rs 10,000 crore. This is excluding the gold trade in the state” ES Biju told TNM.
‘Seeing shops open is a relief’
The state government imposed a total lockdown on May 8, when the COVID-19 cases were surging and a Test Positivity Rate of 27% was reported. The lockdown was eased from June 17 and the curbs were eased in phases, and restrictions were imposed in certain panchayats, municipalities and corporations based on the number of COVID-19 cases there. Shops and marketplaces were allowed to open on alternate days, based on the number of cases in an area, while a complete lockdown continued on weekends. Later, the lockdown was imposed only on Sundays, and the categorisation of areas was decided based on the number of COVID-19 patients there. The government also decided to open shops, markets and offices for six days a week, with the revised regulations issued on August 4.
“That was the solace— that we could open the shops. Seeing them open is a relief. The sale is nowhere near what it used to be for the festival season. The difference is that people are buying only for necessity and there is no luxury shopping, which is turning out to be a loss for traders. Also, shops can‘t be opened in all areas; they have to be closed in critical containment areas (where the number of COVID-19 cases is high),” G Karthikeyan, state President of the Kerala Merchants' Chamber of Commerce, which has 12 traders associations associated with it, said.
Another factor that has impacted sales is that, while most parts of Kerala have been ‘unlocked’, dining in restaurants is still not allowed. “This has also impacted us as the nature of people in Kerala is to step out to dine and shop together. They would shop and club it with dining out. Also, there are no special seasons now, no temple festivals, and the number of pilgrims for the Sabarimala season has been restricted. The festivals other than Onam were also huge selling occasions for us,” Biju added. The lavish spending of shoppers during Onam would boost the income of traders’ employees, who would also receive bonuses for the festival. “Now, the assured income and bonus are for government employees only, not for those working under private employers,” Karthikeyan said.
However, the impact on Onam sales began as early as 2018, when the state witnessed a deluge and floods in the following year, which impacted traders severely. The growth rate of the economy was the lowest in 30 years due to the floods, former Finance Minister Thomas Isaac had said. “But the flood lasted for days and did not impact all the districts. The pandemic has lasted for almost two years, and is still going on. This has crumpled us. However, the loss caused by the flood too was huge and amounted to crores, as the traders suffered the loss of products and equipments” Biju said.
The pre-Onam sale of textiles and home appliances have taken a major hit, with sales dropping by 70% in 2020. “It’s even worse this year; the loss is 30-40% higher than the previous year. Even during last year’s lockdown, people were hopeful they would be able to regain their income, money and jobs. But with the pandemic lasting, people have become pessimistic about the future. They have abstained from shopping for non-essentials, especially the middle class and those in the lower-income group. The flood was one attack, but this pandemic has cost people their jobs, and hence their earnings. Also, the price of some products has increased, which also makes people abstain from buying. The pandemic has forced many not to step out too for fear of contracting the infection,” said Yusuf VA, state Executive Member of the Dealers of Association of TV and Appliances (DATA).
No respite from loans
According to the traders, many small and medium-scale traders have shut shop for not being able to recover their losses. The larger businesses are trying to remain open, as they fear that closing down franchises would affect their brand. Those who had to borrow money to stay afloat are finding little recourse as well. “Though a moratorium was declared for loans, there was no exemption for paying interest,” said Karthikeyan. Acute financial losses have even pushed traders to suicide. According to a report in The New Indian Express, 20 people died by suicide in 45 days between mid-June and August alone. “The government should step in to back up the industry for its survival,” Yusuf said.
Biju said that 20,000 traders have applied to unlink from Good and Services Tax (GST) registration as their revenues have been hit. “This is apart from 11,000 restaurant owners who have applied for the same,” he said. This is despite the fact that in August 2019, the GST Council doubled the limit for exemption from payment of GST from Rs 20 lakh to Rs 40 lakh.