THIRUVANANTHAPURAM: State budget 2018-19, the second full-fledged one of the Pinarayi Vijayan government, will lay equal stress on infrastructure development and social security. Priority will be given to bring down the revenue and fiscal deficits in a time-bound manner.
Speaking to Express, Finance Minister Thomas Isaac said drastic measures were needed to reduce the gap between revenue and expenditure.“The gap has been widening for the past five years. This year it aggravated to a situation where drastic measures have to be adopted,” said Isaac.
“Compared to the previous year, this year’s revenue growth is just 7.6 pc while the expenditure went up by 22 pc. The Central Government’s certain restrictions on borrowing worsened the situation. Now it has been resolved. All the pending bills have been cleared,” he said.The widening revenue-expenditure gap is putting strain on the government and fiscal consolidation is its priority.
Fiscal deficit will be kept at 3 pc and revenue deficit will be brought down. Since the GST has not raised the revenue as expected, restrictions will be put on expenditure. Zero revenue deficit is a goal to be achieved in this government’s tenure.Isaac said fiscal consolidation was important for the KIIFB’s success as well. Bills of KIIFB projects have started coming in and huge borrowing is a necessity.
“Global rating agency CRISIL has accorded ‘A+ Rating’ to the KIIFB, thanks to its well-designed administration system. If the government finances are in a mess, KIIFB’s credibility and rating will go down. It shouldn’t happen,” he said. The minister expressed hope the existing issues related to the GST would be resolved soon.
Ahead of the state budget 2018-19, Finance Minister Thomas Isaac speaks to Express about the opportunities and challenges awaiting Kerala as well as a vision plan for the state’s development.
Q. Can we expect big announcements on infrastructure development in the upcoming budget?
A. I do not wish to make big announcements for the sake of publicity a la Modi (laughs).
In the last budget, I’d announced infrastructure development projects worth `50,000 crore through KIIFB (Kerala Infrastructure Investment Fund Board). Now, the challenge is to implement them in a time-bound manner. I’m happy that KIIFB is making an impact in every constituency. The government is confident of completing all the works within the deadline.
Q. Will welfare schemes take a backseat in the push for development?
A. Never. All welfare schemes will be carried forward and expanded. The Food Security Act will be implemented this year and we are committed to ensuring a hunger-free Kerala.
A comprehensive housing programme will be launched this year. Interventions will be made to make healthcare and education affordable for all. This government’s social security schemes extend from the cradle to the grave.
If you ask us how investing huge money in development of roads and other infrastructure or ease of doing business are going to benefit ordinary people who support the Left, social security schemes are our answer.
Q. How’s the progress of the comprehensive health insurance scheme announced in the previous budget?
A. Infrastructure development in public hospitals, a pre-requisite for the scheme, is being done. Every taluk hospital has a dialysis unit now. District hospitals will soon have cardiac surgery rooms with allied facilities like scanning. All medical college hospitals have oncology departments. Malabar Cancer Centre will be raised to the level of RCC (Regional Cancer Centre) and a cancer care centre is coming up in Kochi. The physical infrastructure for the scheme is being set up. Our health assurance programme will be a one of its kind in the country.
Q. Has the Left Government’s steps to improve public education succeeded?
A. Undoubtedly, it is one of the biggest achievements of this government. 1.5 lakh students have shifted from unaided to aided or government schools. This shows the people’s confidence in the government. 45,000 clasrooms were digitalised. Now, focus will be on to improve facilities in primary and upper primary schools.
Q. Is it time for some large-scale austerity measures?
A. There will be several measures. Only the symbolic ones can be announced. Others are to be implemented in time (laughs).
Q. Will there be any good news for youth in the budget, particularly the educated yet unemployed?
A. This government is attempting to create an ecosystem to groom young entrepreneurs.
The Startup Mission and KFC (Kerala Financial Corporation) will devise schemes towards this end.
There will be a shift in the focus of KFC. The government wants the Kerala Financial Corporation to be a responsible mentor, not just a PSU that makes profit by lending.
Talking points
Compared to the previous year, this year’s revenue growth is just 7.6 pc
Expenditure has gone up by 22 pc
Widening revenue-expenditure gap is putting strain on the government
Fiscal deficit will be kept at 3 pc and revenue deficit will be brought down