Analysis: India's Kerala State Budget 2002

Trivandrum, India, Mar. 14 2002 (INS News) -- The state budget of the Kerala, at a glance, seems to be presented keeping in the view of the Fiscal reformation implemented in centre by Dr. Manmohan sing. Mr. Sankaranarayanan, Finance Minister of the State of Kerala presenting, the very outset of the Budget remarked ; Winds of change and liberalisation are strongly blowing across the globe offering immense opportunities for growth and prosperity.'

The juncture is for a revolutionary step for the reformation of Fiscal reformation intend to bring down the fiscal deficit, to regulate the revincrease in interest payments, wages and salaries and eliminate subsidies and undertake substantive reform of the public sector.

Finance Minister presents budget. Pic: Sam Asraf

Prienue deficit, to limit the vate sector participation will be encouraged in public sector and future of the loss making units will be considered seriously, gives a clear picture of changes. Government of India enter its second phase of reformation by declaring the labour policy after completing the fiscal reformation within a decade. But in the case of State there is no chance of hind regarding the span of time.

At the same time Finance Minister stressed the urgent need of for a new legislation during the current session of the Assembly to regulate and control the unhealthy practices in the Labour section. The present conditions are such that it is unrealistic to expect government to be main source of employment in future. In the next breath Finance Minister pointed out about the special scheme to generate employment to five lakh youths in the next year.

With the economic slow down continuing unchecked and revenue targets dripping by Rs.700 in the current year itself, it is to be seen how realistic would be the new scheme. The Budget fails to support any sector except fiscal reformation. The path forward is by no means easy.

The road ahead is difficult. No concrete and creative measure to tackle the existing situation. The only proposal mentioned in the budget were to raise the rate of tax on bullion and precious stones and levy entry tax to some items makes a total increase of revenue for about 30 crores. An expected total of Rs.283.50 crores is expected from the resource mobilisation in the next year. Though there will be a over all surplus of 615.98 crores in 2002 - 2003, this will completely go for bridging the backlog of the year 2001 - 2002. How far the statistical figure balance with reality is the question. There has been a steep decline of the price of major agriculture commodities as a result of trade liberalisation and removal of quantitative restrictions in import.

The economic survey hinds fall of revenue by way of sales tax. This will effect he revenue. Getting assistance of Rs.3000 crores from Asian Development Bank will not even enable for a permanent solution of the financial crisis which effected the state. More over the whole state will plunge again in to liability. The apt way is giving more importance to internal resource mobilisation.

Announcement of an innovative, although late, and investor friendly information technology focusing on the creation of an enabling environment for the accelerated growth of Information Technology Industry. While compare to others Kerala state is already behind other south India States in the respect. Failure of timely action followed by hesitation to exploit the advanced technology is the manufacturer

It affected for the development. With the objective of posting Green Kerala as a leading destination for I.T. Government intends to develop Kochi as the premier I.T investment location in South Asia. How far it succeed is the question? Generally there is a tendency of escalation of investment in the Open Door Policy of Liberalisation. But here there is a lack even for a blue print of attractive package for the investments. Instead of blindly following the path of liberalisation, taking stock of the interest of state can easily explore for attracting investment.

There is no doubt, the state have to face serious consequences if reformation are based purely the policy of International agencies like World Bankand International Monetary Fund. We have the pathetic picture of some south East Asia and the crisis facing by Argentina due to adopting the policy dictated by international Agencies. The Budget proposes to give high priority to the development and to reform public sector enterprises Four new industrial zone will be set up at Trivandrum, Kochi, Palakkad and Calicut. Strangely silent on the incentives for entrepreneurs.

At the present state of our country's development, agriculture sector contributes a large part of the national income and provides employment to a significant part of the population. There is a steep decline of in the price of major commodities like rubber, Pepper, and coconut.

Even though the Finance Minister admits the decline of price in the major agricultural commodities, but not offers any creative measures to prevent the fall of prices and even no solace of words taken place in the budget who were in deep financial crisis. As a new approach and shift in vision the department of irrigation and Water Supply has been renamed as Department of Water resources.

This change is not only cosmetic, but indicates change in perception and realisation of a new challenges and potential. The change of name mounts suspicious of entering of private sector in the Water Authority.

Governor of the State of Kerala, Sukh Dev Sing Kang,speaking on the opening day of the Legislative Assembly stressed the need of restructuring water Authority and private participation in the Water Authority sector. Not only our beautiful streams, rivers, backwaters
fell in the hands of multinational companies but also there lies hidden danger of Drinking water supply in future.

Whatever the reformation takes place, No ruler forget the fact 'Ours is a welfare state' and that is what the constitution assures inevitably. Welfare of the mass and prosperity is the goal of a government. No one is adverse for any reformation for the development. But rulers of the democratic country should not become a mere puppet for the implementation of the policy refereed to by the World Bank, Asian Development Bank, International Monetary Fund The out come will be the chain of dependence in future.

All the steps should have an anticipatory alert. The opposition Left Democratic Party headed by Communist Pary of India {Marxist} alleged that the Budget presented by Finance Minister, K.Sankaranarayan was " for the Asian Development Bank and by the Asian Development Bank"
and described it as anti-development and anti-people.

-- Sam Asharaf - South Asia Correspondent in Trivandrum, India

-- Earlier Stories
Southern India: Kerala State Continues Budget Reforms MAR. 8 2002
Additional resource mobilisation proposals to mop up RS 2.835 billion, efforts to create half a million jobs and measures to empower women were some of the highlights of the Kerala budget for 2002-2003 presented in the state assembly today. There is a deficit of RS 2.73 billion in the second budget of the United Democratic Front (UDF) government in nine months.

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