ON THE PHONE, Muhammad, a shopkeeper from Minicoy, the southern-most coral atoll in the Lakshadweep islands, sounded worried. Sales at his provisions-and-stationery shop had crashed. By March 2022, his monthly income had dropped from up to Rs 60,000, to down to as low as Rs 10,000. “Buying has come down. Everyone is facing a problem in their business,” he told me. He had had to dismiss a couple of his employees. “There is no work.”
The story is the same on all the other islands, a resident of Kavaratti—Lakshadweep’s capital, located around two hundred and fifty kilometres north of Minicoy—who keenly tracks government data told me on condition of anonymity. Businesses had recovered from the economic shocks of demonetisation and the COVID-19 pandemic fairly quickly, he said, but this time was different. “Every shopkeeper I have spoken to, including those running medical shops, cites at least a seventy-percent drop in sales in the past few months.”
Locals in Lakshadweep linked the trigger for the slowdown with the islands’ administrator, the politician Praful Khoda Patel, a former Gujarat cabinet minister, who was appointed to the archipelago in December 2020. Residents I spoke to said that Patel’s economic and administrative decisions have choked almost all local economic activity. To cite just two instances, Patel’s administration reduced the number of ships ferrying freight to the archipelago from seven to two and cut budgetary support to panchayats and cooperative societies. A bigger blow, however, came from his orders to fire as many as three thousand temporary and casual government workers. As the state is the biggest employer in these lagoon-fringed atolls, and the local economy is too small to absorb most of the terminated employees, those who have been laid off have been unable to find jobs. As these households tighten their belts, the island economy of shops, hotels and other businesses has tanked.