Kerala finance minister T.M. Thomas Isaac presents state budget. File photo/Manoj ChemancheriThe finance minister and the finance department are supposed to present the revenue and expenditure of the treasury as the budget in the Legislative Assembly. But they introduced a new idea to borrow through an exterior agency called KIIFB (Kerala Infrastructure Investment Fund Board) for infrastructure development. The Left Democratic Front government has announced projects worth Rs 50,000 crore in the two budgets in the last one year. They are yet to start any of those projects. The budget minus KIIFB is zero - that is the LDF budget in a nutshell.
The government said that the security deposit of the chits organized by the Kerala State Financial Enterprises will be shifted to the KIIFB to fund the projects and that money has to be repaid only after five years. However, the government has done nothing to amend the chit fund act or seek approval from the Reserve Bank of India.
The government brought out another white paper to prove that public finance was in disarray. It sought to present that the public expenditure was very high in the last five years. Yet the LDF government could increase social security pensions to Rs 1,000 with retrospective effect even without imposing any new tax. The government even diverted the social security cess to the KIIFB. The fact that the treasury is intact despite these measures disproves the white paper.
This government has not rolled out any projects such as Kochi Metro, the Kannur airport and the Vizhinjam port which would generate money when completed. Kerala's revenue will rise three-fold when the Goods and Services Act is implemented across the country. That will enable the government to fund all the projects even without the KIIFB. Then all the projects announced through the KIIFB will have to be brought back to the budget. The Finance Department is implementing such Tughlak reforms.
The LDF promised to set everything right but the government could not even sustain the previous government's achievements. I will cite a few examples.
The LDF said they would keep prices of essential commodities under check for the coming five years. The prices, in fact, have doubled in a year. The subsidy granted by the government to bring down the price of rice has vanished into middlemen's hands. The price of rice has increased from Rs 28 to Rs 50. The ration cards could not be distributed for the last one year.
If the previous government increased the fees in the medical colleges by 10 percent annually for five years, this government increased it by 115 percent in a single year. The government closed down the five government medical colleges started by the previous government. This government has turned the savior of the self-financing college managements.
The governor had to intervene to stop plans to let loose the killers who belonged to the ruling party. Political murders are on the rise in the state. The stage is all set to bring back the banned single-digit lottery and online lottery. Top bureaucrats are being targeted for political games.
But we can't turn a blind eye towards the popular decisions of this government. The total electrification project is almost complete. That is an achievement. The progress of the housing scheme through the Life Mission is a blessing for the poor. Though there were efforts to discontinue the Karnuya scheme, the decision to keep the project is commendable.
The continuation of the stimulus package for rubber farmers is also commendable but the government has not considered a demand to ensure a fixed sum per kilo.
The announcement that the school textbooks will be distributed on time is promising. The government is also trying to make Kerala an investment-friendly state.
