KOCHI: Former finance minister Thomas Isaac defended the state’s reliance on extra-budgetary borrowings through institutions like KIIFB, saying the loans are taken for meeting capital expenditure to enhance critical infrastructure and welfare schemes benefiting the masses.
“Many raised the question ‘why Kerala should borrow outside the budget?’. The finance commissions of Kerala have been critical of this inter-generational equity and burdening the future. I consider this rubbish. If the loans are taken for the current expenditure, then they have a reason to be critical. But it is taken for capital expenditures like building houses. Liability is there, but there is also an asset that is inevitable for wellbeing. So what is the big deal?,” Isaac asked.
He also said the local self-governments play a crucial role in the development of a city. He highlighted the need to continue participatory budgeting. “The state initiated the decentralisation process and the people’s planning campaign back in 1996 by making available funds to the local bodies. Planning is important for the success of such projects. Now every local government body indulges in planning,” he said.
“While the state’s plans are a repetition of old schemes, local bodies reflect new projects. A substantial devolution is taking place at the local government level for infrastructure creation,” he said. Isaac spoke about various funding options before the government, including the PPP (Public Private Partnership) and BOT (Build Operate and Transfer) methods, while heaping praise on the Cochin International Airport Ltd (CIAL) model.
“It’s one successful model that can be replicated in urban development projects in future. The government has control, in the sense, it appoints the managing director and the chairman is the chief minister. Yet the director board operates autonomously. CIAL is no more a service providereloper for other infrastructure projects for Kerala, such as the National Water Way,” said Isaac.