Kerala Budget 2021: Half a dose

KN Balagopal focuses on Kerala’s health in maiden budget, Covid-hit economy has to wait. Rs 20,000-crore Covid package, Rs 1,500 crore for free vaccination, hospital upgrade find place.

Published: 05th June 2021 06:48 AM  |   Last Updated: 05th June 2021 09:29 AM   |  A+A-

Kerala Finance Minister KN Balagopal presents the maiden budget of the government's second tenure. (Photo| Vincent Pulickal, EPS)

Kerala Finance Minister KN Balagopal presents the maiden budget of the government's second tenure. (Photo| Vincent Pulickal, EPS)

Express News Service

It’s health that requires immediate attention and the economy can wait. This seems to be the message from the first budget of the second Pinarayi Vijayan government. Presenting the revised budget for 2021-22, Finance Minister KN Balagopal on Friday announced a slew of new measures aimed at dealing with the Covid-19 pandemic, including Rs 20,000-crore second Covid package and Rs 1,500 crore for providing free vaccines to all above 18 years and 10-bed isolation wards in all community health centres, taluk, district and general hospitals.

The finance minister, who retained all the proposals announced by his predecessor T M Thomas Isaac in the budget presented before the election, refrained from imposing any additional tax, considering the distress across sectors. What that means is that the budget has failed to mention where the additional revenue required for the increased expenditure is coming from. “The economy could be revived only by reducing the impact of the second wave and preventing a third wave of the pandemic,” Balagopal said, making the government’s priorities clear.

People, without maintaining social distancing, crowd at a health centre in Puthukurichy in thestate capital for vaccination. The budget has given thrust to tackling Covid.
(BP Deepu, EPS)

Even under a severe financial strain, he explained the government’s decision not to hike taxes saying: “During a crisis, the Left approach is to stand up front and save the society even through borrowings. The first Pinarayi Government had done that. This government will also follow the same policy.” The onehour- one-minute matter-of-fact presentation stood in stark contrast to Isaac’s three-hour-plus speeches laced with poems, short stories and narratives.

The Kerala budget -- the first by a new minister after 25 budgets together by the duo of Thomas Isaac (12) and K M Mani (13) as part of successive LDF and UDF governments over the last two decades -- also contained Rs 11,000-crore worth developmental projects for coastal areas to be implemented in the next four years, a Malabar literary tourism circuit plan and a proposal disburse Rs 2,000 crore loans via Kerala Bank at 4% interest rate for setting up agri-infrastructure projects such as cold chains.

The budget also contained measures to help the ailing plantation sector and encouraged diversification through the cultivation of crops such as rambutan, avocado and dragon fruit, mangosteen, longan etc in addition to traditional plantation crops. While the budget set aside Rs 2 crore each to construct memorials for Communist icon K R Gouri Amma and Kerala Congress veteran R Balakrishna Pillai, another Rs 50 lakh was earmarked for establishing ‘Mar Chrysostom Chair’ at Mahatma Gandhi University.

No measures to help Covid-hit transport sector

The bud get, however, contained no measures to help the lockdown-hit travel, tourism, transport and small trading communities. Experts also expressed concern about the lack of steps to cut unnecessary and extravagant expenditures. Nirmala Padmanabhan, economist and a member of the Kerala Public Expenditure Review Committee, said: “No doubt, the FM’s options are limited given the fact that we are going through a health disaster. But what’s worrying is that he has not outlined a fiscal consolidation plan.” She said Balagopal could have taken steps to collect the huge tax arrears, hike rates in undertaxed segments and given the freedom to local bodies to improve the tax collection.

The revised budget was also not without controversy. The Rs 8,900 crore mentioned in the Covid package “for disbursing money directly to those who are in crisis due to the loss of livelihood” was initially welcomed by the Opposition leaders, who said the direct money transfer which they have been proposing will help revive the economy.

The Finance Minister, however, explained to reporters that the amount mentioned was the money due to pensioners and the funds distributed in other welfare schemes. “What I intended was that the money will come to the market, which will revive the economy,” Balagopal clarified. Joseph K V, economist and director of the Institute of International Migration and Development, said the state government can’t live on borrowed money infinitely. “The government has to accept that it’s (borrowing) not an Akshaya Patra or the inexhaustible vessel,” he said.


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