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DEATHQUAKE;
ECONOMIC IMPACT
What
Goes Down...
Having
escaped with minor injuries, industry is shaken but not deterred
By Rohit
Saran with
V.
Shankar Aiyar in
Ahmedabad
When
the second most industrialised state in the country is ripped apart by
one of the severest earthquakes in recent times, an economic disaster
seems imminent. After all, Gujarat contributes 11 per cent to India's
national income and has about a fifth of the
total industrial investment made in the country. No wonder the estimates
of the economic loss are flying thick and fast.
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| STOCK
TAKING: A shopkeeper surveys the damage to his establishment in Bhuj |
Both the
Federation of Indian Chambers of Commerce and Industry (FICCI) and the
Gujarat Chambers of Commerce and Industry (GCCI) have put the quake's
damage at Rs 20,000-25,000 crore-which exceeds the total revenues of the
Gujarat Government in 1999-2000. The Confederation of Indian Industry
(CII) has a different set of estimates. According to a survey it did with
the IIM-Ahmedabad, the reconstruction of physical and social infrastructure
in Kutch will cost Rs 5,250 crore. The damage outside Kutch district is
Rs 1,500 crore.
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| THE
UGLY INFRASTRUCTURE DAMAGE: The damage suffered at Kandla disrupted
cargo traffic at Gujarat's largest port |
What's the
real loss? And how do we figure that out? No one is sure about that, least
of all the Government which is yet to arrive at even the exact death toll.
But a dip stick survey of the mood of the business community in Gujarat
suggests that the picture is not as grim as has been projected. The fear
that the Indian economy would be buried under the debris is vastly exaggerated.
Let's run
through the basic facts first.
Kutch, the
worst-affected district, is also one of the least industrialised. Surat,
which accounts for over 45 per cent of the diamond-cutting business in
India, has not reported any direct loss to industrial infrastructure.
Says Mahendra Mehta, a veteran diamond merchant, "The cutting units
haven't suffered any significant physical damage." Textile looms,
the other big business in the district, have also not reported any major
losses. Rajkot, the largest manufacturer of diesel pumps and home to thousands
of foundries, also escaped any damage to its factories.
In Ahmedabad
too, the damage has been largely confined to residential buildings-171
high-rise buildings in the state capital have been flattened. Naturally,
the immediate fallout has been on the real-estate business. Property prices
in the state capital are down by anything between 25 and 50 per cent.
But local builders like Jitubhai Bhow believe that the "shock and
fear of living in multi-storied buildings will trigger growth in new suburban
areas''.
Contd
Pg 2
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