Kerala Budget 2017: More Questions than Answers

By K Kunhikrishnan

The 68th Kerala Budget presented by the Kerala Finance Minister with the expected rhetoric of criticism of the Central Government’s demonetization and the financial policies, leaves more questions than answers. There are many positive statements and schemes, but riddled with practical issues of implementation. The Economic Survey (2015-2016) has stated that Kerala has outstanding debt liabilities of INR 157370.33 crores. Out of the 122 Public Sector Undertakings in the State only 107 are working and only 50 of them are profit making. The state spends INR 31909 crores for payment of salaries, INR 18,174 crores for Pension and INR 13631 crores towards interests. Revenue deficit in the Budget is placed at INR 16043.14. Kerala is running on a money order economy and the state of affairs in countries from where Keralites are working is not continuing to be conducive for the flow of money. The panacea that the Finance Minister prescribes for infrastructure development is investment from Non-resident Keralites. Kerala State Infrastructure Board (KIIFB) is expected to attract whopping sums, like INR 50,000 crores in five years for roads.  Kerala State Financial Enterprises(KSFE) will also start chit funds for attracting investments up to Rs. 15,000 crores. This projection is to be seen in perspective as inflow of funds is not on increase and of the industrial climate in the state, which admittedly is not the best for new investments. The militancy of trade unionism, irrespective of any political party, has been a great deterrent.

The Budget projects various ‘Missions’ in corporate style and they are laudable if executed properly will definitely pave way for a cleaner, and socially safer and economically better state. While schemes have been announced with lofty ideals, a social auditing mechanism is not inbuilt to assess actual performance.

The state has two major sources of income: one is tourism, thanks to the bounties of nature making the state, ‘God’s Own Country’ and the large scale mineral deposits which if exploited properly will improve Kerala’s income substantially. Kerala Tourism has been doing well with many novel schemes and tourism contributing 10% of the States income as stated by the Finance Minister, allocation of funds has been done properly. For marketing alone an amount of INR 106 crores have been allotted, INR. 5 crores for Boat Races, INR 15 crores for encouragement of Festivals and INR 35 crores for up gradation of Guest Houses and INR 10 crores for cleaning the canals of Alappuzha. Unfortunately, Kerala’s marketing of tourism is mostly abroad and the inflow of tourist traffic from abroad has not seen comparative increase. Intensive efforts have to be made promoting Kerala tourism in other states.

For utilization of mineral wealth, a major political decision is called for which is not reflected in the budget other than allotment for the profit making Kerala Minerals and Metals Limited (profit last year INR 21.16 crores). Their area of operation is extremely limited and if the available mineral wealth is exploited Kerala’s economy would be one of prosperity.

Fair amounts have been allocated for the IT sector. For new Start Ups by youth, the allocation is INR 70 crores. Other than Techno Parks and Technology Parks, the state should set up a major Hub for Incubation and Innovation and a single window clearing system for new enterprises. This has been very successfully done by other states in the South, winning laurels from global IT giants. Sad that Kerala Budget does not even mention such a step!

For food -related areas allocation is made for paddy procurement and storage and for ration subsidies. Allotment has also been made for various public sector bodies like Horti Corp, Civil Supplies Corporation, Consumer Fed, Supply Co, VFPCK etc. All these agencies in a layman’s perception do almost the same work. Why not combine and bring them under one umbrella so that the substantial expenditure on overheads of Chair Persons and paraphernalia could be saved? The story of allotment of new ration cards is several years-old.  An allotment of INR 117 crores have been made for the purpose in the current Budget, which is a whopping sum and there is no guarantee that we will get a correct ration card in the near future. Central Government has been blamed for the non-implementation of food safety in the state. Facts as reported in the media the blame is entirely on neither the State nor not furnishing the necessary documentation in time!

Health Insurance for State Government employees and pensioners is a welcome step. Central Government employees and Pensioners already have a Health Scheme which is under threat and a lot leaves it to be desired in its functioning. Hence while implementing the Insurance scheme proper attention and inputs to details have to be factored in. Data banks on citizens’ health and creation of new posts of doctors and nurses, and free/subsidized treatment for life style diseases and for organ transplanted patients are welcome steps. It is also a serious matter why patients prefer private hospitals for treatment?

The most disappointing aspect of the Budget is the lack of understanding the enormity of the unprecedented and man-made drought situation and of the seriousness of greening Kerala. Haritha Kerala Mission was started with a lot of fanfare but their work is yet to produce any tangible result; same is the story of the removal of garbage, as the Shuchithwa Mission has not done anything. Kerala Finance Minister is reputed to have achieved big results in these two areas of cleaning the city and in growing organic vegetables as a mass movement, when he was only a MLA from Alappuzha. How come he has not replicated his enthusiasm for the whole state other than making nominal allotments? Allotment of Rs. 150 crores for soil and water conservation and INR 208 crores for minor irrigation projects is paltry. For preserving every drop of rain water a big campaign has to be in place and that is not there in the budget. It is also stated that during the onset of monsoon (truant for the last few years!)  30 crores of trees would be planted! It is as of now a pipe dream as there are not as many seedlings and the large scale planting of alien species which destroy the soil structure and water retention capacity have already harmed the environment. Similarly, protection and revival of water bodies have not received adequate attention as the revival of such bodies should receive topmost priority given the lowering waterfall, drying up of wells, streams and rivers. If we lose the bounties of nature Kerala will lose its stature as a dream destination and hence every step to make it greener must be taken and resources for the same have to be found out. The allocation of INR 30 crores for drought relief is far from sufficient.  Kasaragod and Wayanad district packages with INR. 19 and INR 90 crores have been announced but their priorities are not known. Development in our system unfortunately has been large incongruous concrete structures and the offices therein. This must change.

Other schemes in education and infrastructure developments like Hill and Coastal Highways are laudable and for building them acquisition of land could be a major hurdle, despite massive plans. The schemes for women’s safety are praiseworthy, but schemes for a total change in the societal attitude are absolutely imperative.

Congratulations to the Finance Minister for announcing a cultural complex in memory of the late ONV Kurup.

K Kunhikrishnan is a retired Additional Director General, Doordarshan and writer.

Cover image courtesy: Rajithmohan,  CC-BY-SA-3.0 via Wikimedia Commons

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