DISASTER

A crippled economy

The cyclone has hit Orissa's already parlous economy hard, and there are no reliable estimates of the losses in the various sectors even weeks after the disaster.

SANTANU SANYAL
in Orissa

ORISSA'S economy is in a shambles. There is hardly any sector that has not been hit hard by the October 29 cyclone. No reliable estimates of the extent of loss were available more than two weeks after the disaster as the government agencies were concentr ating their energies on the distribution of relief materials and the disposal of bodies. However, preliminary projections indicated that the impact could indeed be enormous.

On November 10, poultry farmers submitted a memorandum to Chief Minister Giridhar Gamang, drawing his attention to the damage caused to the poultry sector. The memorandum put the loss, which included the destruction of birds, hatcheries, feed mills and s heds, at Rs.40 crores. According to preliminary estimates, more than 1,000 poultry farmers, located mostly in the districts of Ganjam, Berhampore, Cuttack and Bhubaneswar, lost their means of livelihood. Altogether, more than 15,000 people engaged in thi s sector have been hit.

The resumption of agricultural operations may take time. The total crop loss is estimated at Rs.1,750 crores. The cyclone left more than 24 lakh hectares of farm land inundated. About 15 lakh ha suffered a loss of between 50 and 75 per cent of standing c rops. In the absence of mechanised farming, the loss of draught animals - more than two lakh head of cattle have been killed - could hamper cultivation in future.

Coconut and betel leaf cultivation has been badly affected. Coconut trees on several hectares of plantations, mostly along the coast, came down and betel leaf plantations, in the districts of Balasore, Puri and Bhadrak, were inundated. The State, which p roduced a surplus of coconuts, will now have to depend on supplies from Andhra Pradesh, Tamil Nadu and Kerala to meet its domestic requirement. The destruction of betel leaf plantations entails a business loss of Rs.25 lakhs a day in Bhubaneswar and Cutt ack alone. Certain varieties of betel leaves grown in some pockets of Balasore district, which are exported, cannot be produced before six months.

C.V. SUBRAMANYAM
What is left of an industrial complex at Paradeep. More than large units, small- and medium-scale industries suffered heavy losses.

The cyclone also destroyed vegetable crops on one lakh hectares - 15,000 ha each in Puri and Jagatsinghpur, 34,000 ha in Kendrapara and 14,000 ha in Cuttack. The average crop yield was eight to 10 tonnes a hectare. The damage to mushroom cultivation has affected 700 families in Nimapara (Puri district), Bhubaneswar and Khurda.

The State's rich dairy sector has also suffered severe losses. Besides the death of milch cows and the destruction of dairy farms, a large number of chilling plants and more than 200 artificial insemination centres were damaged. At least 500 milk coopera tives need assistance to restart their operations. The Orissa Milk Producers' Cooperative Federation (Omfed), which collected more than one lakh litres of milk a day and supplied it to Bhubaneswar, Cuttack and Puri, among other places, will now depend on supplies of milk powder from other States to maintain normal deliveries. The daily collection of milk dropped to around 10,000 litres. Omfed is likely to procure milk from Andhra Pradesh and West Bengal.

The National Dairy Development Board (NDDB), in association with the Anand Milk Producers' Union, despatched 200 tonnes of milk powder and 200 tonnes of cattle feed. The NDDB also sent vaccines and life-saving drugs for animals.

According to the State Small and Medium Entrepreneurs Association, nearly 700 small- and medium-scale units, which employed about 70,000 to 80,000 people, have been devastated in Bhubaneswar and Cuttack. The figure is expected to rise when information fr om other districts arrives. The association has urged the State government to provide interest-free loans of up to Rs.10 lakhs to the affected units and declare a five-year moratorium on loan repayment by them. Units with a paid-up capital of more than R s.10 lakhs should be helped with grants and soft loans, it said. About 400 small-scale and 24 medium-scale units that survived the cyclone were looted by anti-social elements, it said.

In the Paradeep port area, fishing activities have come to a standstill. About 300 fishermen were killed; nearly 60 per cent of the 11,000 country boats were destroyed, marking a loss of about Rs.24 crores. In addition, 2,500 mechanised boats and 400 tra wlers sank, causing a loss of another Rs.30 crores. About 500 trawlers, mostly belonging to fishermen from Andhra Pradesh, sank at Paradeep port. The export of marine products from Orissa has hence suffered a setback.

ELECTRICITY supply and telecommunications services are yet to be restored in the 12 affected districts. Cesco, an undertaking of AES Corp, of the United States, had planned to give power connections to all applicants by November 14. The plan has gone hay wire. AES Corp, which runs a power distribution system in eight districts of Orissa, has sought a tariff hike to offset the losses, estimated at Rs.300 crores. Cesco plans to appeal to the State government for compensation. If the government declines to oblige it, it will approach the State-level power regulatory authority, the Orissa Electricity Regulatory Commission, with a request to pass the burden on to the consumers. Power consumers are angry with Cesco's plan. The loss, they say, is largely owing to the failure of the company to insure its assets. Some consumers have threatened to take the matter to the streets. "Why should the consumers and the State government be made to pay for the loss suffered by a private concern," asked one consumer. Inte restingly, some sections of the State government are for compensating Cesco suitably and have accordingly taken up the issue with the Central government.

The loss to the telecom circle is estimated at Rs.50 crores, with a large number of telephone exchanges washed away and microwave towers - at Nimapara, Paradeep, Kakatpur and Jajpur - uprooted.

The local chambers of commerce have estimated the loss to industry, big and small, at Rs.500 crores. They emphasise the importance of early normalisation of the affected units. This process could be accelerated if an interest holiday is declared for one year on loans issued by commercial banks, according to them. They also want the repayment period should be extended. Fresh working capital should be made available to industry at a concessional rate and the requirement of margin money on fresh loans shou ld not be insisted upon, the chambers have suggested.

Following the cyclone havoc, the Reserve Bank of India and the Union Finance Ministry directed all banks to provide immediate assistance to the affected people to help them raise new crops and purchase farm implements, seeds, fertilizers and insecticides . Banks and other financial institutions were told to extend loans to rebuild houses.

The State government has sought a Central assistance of about Rs.350 crores to reconstruct about 1.2 million dwelling units. It has also urged the authorities concerned to build houses under the Indira Awas Yojana. The Housing and Urban Development Corpo ration (HUDCO) has announced that it would provide Rs.187.5 crores towards the reconstruction of about 75,000 dwelling units.

Sharda Singh, Chairman and Managing Director of UCO Bank and convener of the State-Level Bankers' Committee (SLBC), led a team of senior bankers and top executives of financial institutions to Orissa and held meetings with the Chief Minister, the Finance Minister, the Chief Secretary and other senior officials in order to assess the kind of assistance the banking sector would be required to provide to raise new crops, rebuild houses and restart businesses and factories in the small and medium sectors. T he Government at that time did not have a correct estimate of the losses or the kind of assistance that would be required. These aspects are likely to be finalised at an SLBC meeting in the near future.

Another factor causing concern is the financial situation of the State government. Doubts have been expressed in certain quarters that the money received for relief and rehabilitation might actually be used to pay the salaries to government employees. Th e critical financial situation of the Government had earlier forced the RBI to clamp restrictions on overdraft. The restrictions have since been lifted.