The global recession is taking its toll on Kerala's remittance economy with thousands of professionals, technicians and workers returning over the past six or seven months.

The trickle is expected to turn into a flood soon. Unofficial estimates suggest that 100 to 150 non-resident Keralites are returning from the Gulf, the biggest source of jobs, each week. Over the past 12 to 15 weeks, at least 2,000 people returned in the coastal belt of Thrissur district alone.

The rate of returnees is high in districts like Thrissur, Kozhikode, Malappuram, Kannur and Kasargod though the problem is critical to all Kerala's 14 districts.

Most of those who have returned are skilled workers like carpenters, masons and drivers and technicians like electricians, welders, fitters and plumbers.

Though the government has a separate department to cater to these NRKs, it has only a vague idea about the numbers returning from the Gulf. NRI organisations, however, say at least 15,000 people have already returned and another 10,000 are expected to follow after March 31 when major European and US companies are expected to reduce their workforces.

Statistics from the state's NRI department show that there are 2 million Keralites working in the Gulf. Soman Mathew, an expert in Gulf-related issues, said at least 5 per cent of them may return over the next year to 16 months.

Najeeb, a returnee from the United Arab Emirates, told Business Standard that it is difficult survive in the Gulf because wages were being reduced and allowances withdrawn.

In countries like Kuwait, he said, salaries had not been paid for the last three months especially by US-based companies. Labour unrest and strikes demanding pay arrears, therefore, have become common, he added.

The growing number of returning NRKs poses a serious threat for the state's economy which has been heavily based on remittances for the past 50 years. Some Rs 1,500 crore (Rs 15 billion) to Rs 2,000 crore (Rs 20 billion) pours in from Gulf NRKs every month, most of which is spent on consumer items, education, tourism and construction. NRKs contribute Rs 35 for every Rs 100 deposited in banks operating in the state.

The fall in remittances could present the state with a major challenge just ahead of its budget due February 20. In January, tax revenues grew just 5 per cent, despite the tax department's best efforts.

The global slowdown had already resulted in setbacks to tourism, and natural rubber cultivation, the two backbones of the state's economy.

Rehabilitating returning NRKs could also put more pressure on the state's administration. The government had already mooted a separate fund for this and sought the central government's intervention because the situation is so critical.

Meanwhile, schools in major cities in Kerala are also facing a crisis because the number of applicants for transfer certificates is rising and is expected to increase further by March since the next academic year begins June.

The state had suffered a similar problem when the first Gulf war broke out in 1991, but things stabilised after 1999-2000 owing to the information technology boom. This time, though, the situation appears more critical with the global slowdown posing multi-faceted challenges to the state and its returning citizens.