Expert Comments | Isaac has rightfully focused on job growth but concrete plan is needed for cost cuts

Expert Comments | Isaac has rightfully focused on job growth but concrete plan is needed for cost cuts

Given the shadow of the severe financial crisis, Kerala finance minister T M Thomas Isaac has done a balancing act in his budget by containing deficit by slashing expenses and increasing revenues. Yet, even as the minister points to an intent to cut costs and mobilise resources, no concrete measures have been announced to lower expenses. A reallocation of resources would not necessarily lead to lower costs. All the government can do is to save money by blocking new recruitments.

The real estate sector is in a standstill already. An increase of land prices is expected to slow down registrations further.

It is a good move to overcome the recession by pumping more money to the marginalised sections by increasing welfare pensions. This becomes all the more laudable in the backdrop of the Union budget which slashed the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme.

Kerala aims at a huge investment to the tune of Rs 20,000 crore in infrastructure through the Kerala Infrastructure Investment Fund Board (KIIFB) to create more employment opportunities. The finance minister’s announcements, from the planting of one crore bamboo saplings to greater allocation of funds to the Kudumbashree and the promotion of vegetable cultivation, are aimed at employment generation.

A notable absence in the budget is the allocation of 8 percent of the state domestic product to the health sector as stipulated by central guidelines. This is striking in a period marked by onslaughts by novel viruses.

The minister was also silent on last year’s promise to set up a company in the model of the Cochin International Airport Limited (CIAL) to revive the plantation sector. The agricultural sector where growth is slowing down has not received its due in the latest budget. Even as the government claims a growth in the industrial sector, that has not reflected in figures of employment or tax realisation.

The budget lays emphasis on environmental conservation. A case in point is a project to rejuvenate 50,000 inland water sources. Yet allocation to the much-hyped tourism sector has not matched last year’s funds.

It is a good thing to announce flood relief packages for Idukki and Wayanad districts. Yet there was no word on the Rs 5,000 crore earmarked for the development of Idukki in last year’s budget.

(The writer is an economist)

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