Job loss fears: Govt says no need to panic

DUBAI|THIRUVANANTHAPURAM: The Dubai debt crisis fuelled fears of job cuts and its adverse fallout on remittance-dependent economy in Kerala but India on Sunday said there was no need to panic confident it will blow over. Kerala finance minister T M Thomas Isaac said he is very “anxious” about the possible slowdown in construction activity in the Gulf following the crisis which could badly affect workers from the state. Over two million migrants from Kerala are working in the Gulf. “A majority of workers in the construction sector in the Gulf are from Kerala. We are really anxious about their future,” Isaac told PTI in Thiruvananthapuram.

The Indian government said it was closely tracking the fall-out of the crisis in Dubai and directed its missions in the region to provide all necessary help the vulnerable section of the Indian workforce in the Gulf who may be affected by the crisis.

Overseas Indian affairs minister Vayalar Ravi calmed the anxieties in India saying Government was not anticipating a surge of returnees to the country from the region as it was confident that the current crisis will blow over because it was much lesser in magnitude compared to the worst period of the global financial meltdown.

“There is no need for undue panic. We are closely monitoring the situation. The crisis had actually started one year back,” Ravi told PTI. The Gulf Emirate’s $60 billion debt woes have sent shock waves around the world.
Ravi’s sentiments were shared by his colleague and Minister of state for Railways E Ahamed.

“There was no room for any panic on the fallout of Dubai’s trouble on India either as the country’s economy was robust as it had proved during the global recession last year,” he said.

Lakhs of workers from India are employed in realty and other sectors in Dubai and other Middle East cities and their families are dependent on remittances. Indians form 42.3% of the population of Dubai. Allaying fears of an exodus of migrant workforce and large scale job losses, India’s consulate in Dubai said the debt crisis had no direct impact on the country and there was no need to panic. “We are confident the government of Dubai and the UAE are fully capable of handling the short-term crisis faced by Dubai World,” India’s Consul General Venu Rajamony told PTI in Dubai.

Indian businessmen and analysts on the ground also said the world was overreacting to the crisis. Local Indian businessmen said it is too early to judge the impact on remittances, redundancies and other business activities.
Managing director of Xpertize United and a board member of the Indian Business Professional Council (IBPC) in Dubai Navin Kapoor said there would be hardly any impact on India. “The exposure of Indian financial institutions to Dubai World is being assessed at this point in time but in my opinion it will have practically no impact on India,” he said. “There is no reason to panic on this issue,” he added.

The Prime Minister’s economic panel meanwhile said it does not expect the Dubai debt crisis to trigger another meltdown in the world and has retained its forecast of Indian economic growth rate to 6.5 per cent for the current fiscal.