In the latest annual budget of the Left-Democratic Front (LDF)-led Kerala Government presented on Friday, the state’s Finance Minister K N Balagopal has announced several new programmes, including some dream projects in the higher education sector intended to boost the employment prospects of young people.
However, the funding for these projects is heavily dependent on the Kerala Infrastructure Investment Fund Board (KIIFB), which makes the Kerala Budget a ‘Two-in-one’ budget.
The projects announced in any budget could be judged only based on how and when they are implemented. With majority of public sector undertakings (PSUs) under the state government bleeding the exchequer, one can only hope that the new projects wouldn’t meet the same fate.
All the new projects would be funded by KIIFB, which is outside the purview of the state Legislature. This, in fact, exposes the incompetence of the state government in implementing developmental projects. The state would have been spared of this situation if it had been diligent in collecting the taxes and non-tax sources of revenue. It may be noted that while the state could achieve a tax collection ratio of Rs 12.4 for Rs 100 during 1975-86, the figure fell to Rs 6.5 last year.
The LDF budget would have earned more credibility had it presented details of the new projects announced and implemented during the last five years.
Meanwhile, the budget speech made no mention about the progress of the Rebuild Kerala Initiative being implemented with foreign credit. The overseas loan will be cleared if it is intended to acquire technology which is not available in India, from abroad. But, the speech gives no indications in this regard.
The announcements regarding plans to earn an additional revenue of Rs 630 crore are only face-saving measures. The government should have taxed luxury vehicles bought by the affluent sections more, rather than targeting the vehicles used by the common man.
Ailing PSUs
Similarly, loss-making PSUs should have been allotted money only to break even and asked to earn some profits to be transferred to the exchequer. These units, which are presently creating an annual loss of around Rs 2,500 crore, should be able to provide job opportunities for the youth. During the last six years, a whopping Rs 15,000 crore of tax payers’ money has been sunk in these PSUs.
Instead of allotting another Rs 1,000 crore to the Kerala State Transport Corporation (KSRTC), the Finance Minister should have mentioned the fate of the Sushil Khanna committee appointed to suggest measures to revive the corporation.
A silver lining
Even though Kerala’s economy is in deep trouble, Balagopal announced a scheme to provide milk and eggs to nursery children two days a week. This is one among the few heart-warming projects in the budget whose fate only time can tell.
