Experts: Budget bold and progressive, but manufacturing sector sidelined

Though experts agree that the Kerala budget presented by finance minister T M Thomas Isaac on Friday was populist, they agree that certain proposals are bold and progressive.

Published: 09th February 2020 06:23 AM  |   Last Updated: 09th February 2020 06:23 AM   |  A+A-

Express News Service

KOCHI: Though experts agree that the Kerala budget presented by finance minister T M Thomas Isaac on Friday was populist, they agree that certain proposals are bold and progressive. The decision to encourage e-vehicles, luxury tax on high-end vehicles, 30 per cent increase in fair value of land around major projects and luxury building tax on big residential buildings have been appreciated by experts. However, it is pointed out that Micro, Small and Medium Enterprises (MSME) sector and organised manufacturing sector deserved more budgetary support.

“I would like to term it an aspirational budget. As it is an election year, the finance minister had limitations. But if he is able to walk the talk, it will be beneficial for the state. The decision to raise the fair value of land around big projects, steps to plug leakage of revenue due to dual pension and redeployment of staff are bold and positive,” said Planning Board former member and founder CEO of Technopark G Vijayaraghavan.

The packages for Idukki, Wayanad can help to improve the infrastructure facilities in these districts. But the big question is whether these districts have the capacity to absorb even 25 per cent of the fund allotted. “The biggest challenge for any government is not identifying the project but implementing them. Unless there is a massive redeployment of staff fixing total accountability at various levels, it is difficult to achieve the goals listed in the budget,” he told TNIE.

Vijayaraghavan observed that Kerala needs to bring amendments to the Kerala Land Reforms Act to reap the benefits of the big push given by the Union budget for horticulture sector. The act has fixed a ceiling of 15 acres on land holdings and only plantation crops are exempted from the restrictions. “We should give the farmers the liberty to cultivate the crops of their choice without ceiling on land holdings. Besides, cultivation of cash crops is not profitable now a days,” he said.

According to Vijayaraghavan, prospects for big manufacturing units are bleak in Kerala unless the trade unions change their attitude. “The bureaucracy in Kerala is inefficient and will not wholeheartedly support implementation of big ticket projects,” said Kerala Public Sector Restructuring and Internal Audit Board (RIAB) former chairman M P Sukumaran Nair.

“The budget follows the conventional way in resource mobilisation. To create more employment opportunities, we need to implement lucrative projects. The budget fails to accord due consideration to the MSME sector. Exploring the possibilities of the titanium sector and encouragement to the electronics and apparel industry would have helped to boost the manufacturing sector,” he said.

According to him the IT industry and start ups do not need budgetary support as it work in a self-sustaining environment. What the sector needs is infrastructure facilities like water, clean environment, good roads and a healthy work culture. The budget provides only `250 crore for 40 public sector units, which is inadequate. The government could have selected a few industries and provided them more funds.  Besides these PSUs have huge assets which need to be capitalised, said Sukumaran Nair.

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