The two main industries of Kerala, seafood and tourism, escaped the brunt of demonetisation, as did the information technology sector. But agriculture -- rubber plantation in particular -- suffered adverse impact, from which it is yet to fully recover.
Seafood exports from the state bring in a large proportion of Kerala's revenue. It showed no adverse impact. If anything, exports grew by 20 per cent in volume terms and 25 per cent in value during the first quarter of 2017-18 compared to the first quarter in the previous year. And tourism keeps the Kerala economy flying.
"Figures from the first quarter speak the story and it has done well," A. Jayathilak, Chairman of the Marine Products Export Development Authority, told IANS, adding that there was no impact of demonetisation on this sector.
He said seafood exports from the country stood at 251,000 tonnes valued at Rs 9,066 crore ($1.42 billion) in the first quarter of the current fiscal, up from 201,000 tonnes worth $1.17 billion during the previous quarter of 2015-16.
The I-T industry also evaded any adverse impact, largely because most transactions in the sector were carried out through the banking channels. "On the contrary, demonetisation served to reinforce the industry's resolve to rigorously follow governance and compliance norms. Since the IT industry, from its formative stages, was not in the clutches of the tax-men, it developed as a legitimate above-board industry," said V.K. Mathews, a member of Nasscom and head of IBS Software Services.
Mathews said demonetisation was a bold move. "It is indeed daring, considering its scope and implication over such a large population, where corruption and noncompliance are part of the nation's culture -- India is the most corrupt nation in Asia and among the worst in the world, according to the recent Forbes report," he added.
The first CEO of Technopark and former Kerala State Planning Board member, G.Vijayaraghavan, told IANS that he had been a supporter of the demonetisation programme from the very beginning and continues to support it. "But", he said, "I feel the whole exercise could have been done better by taking into confidence all the chief ministers and the state finance ministers a few hours before it was announced, but without giving them the time to inform their cronies about it," said the technocrat.
He said 80 per cent of Indians did not have a problem with withdrawal limits as these were "much higher than what the majority required." He said the group that was most impacted was the politicians'.
He said that to conclude that the economy had failed because of demonetisation was like saying that black money was required for economic development. "I am unable to agree with that," he added.
The tourism industry too remained largely unaffected because most of the visitors make books through the properties or through agents before they arrive.
"If there was any issue, it was related to tourists who had to get Indian currency and also to those who already were in the state and had the notes that went out of circulation . For the business as such , I don't think there was a direct impact as few resorts collect cash from guests," said M.R. Narayanan, general secretary of the Confederation of Tourism Industry in Kerala.
According to official figures, foreign tourist arrivals in Kerala in 2016 were 103,800, up from 977,479 in 2015, and domestic tourists grew by 5.67 per cent and touched 13,172,535 visitors. The total foreign exchange earnings from the tourism sector was Rs 7749.51 crore during 2016.
The major impact, however, was felt by the agrarian community, which includes small rubber farmers and also those who were engaged in cultivation of cash crops like banana and arecanut.
"We continue to be affected by demonetisation. It came when rubber prices were already low. It was a cruel jolt as rubber dealers had no money to pay us and this went on for long. For those who had no other source of income, it was a nightmare," said Thomas Mathew, a small rubber farmer in Kottayam.
The nightmare continued for those engaged in cultivation of banana. November and December are generally the months when fresh plants are sown. With little money to pay for the plants, many had to forego the season's cultivation. Daily wage earners were, of course, the worst affected.
"We survive by working in small homesteads and with no cash available, people used to avoid calling us to do the daily labour. This went on for several months and that hit us very badly. We wish to know who benefited through this foolish exercise," asked Sasidharan, a daily labourer.