THIRUVANANTHAPURAM: From day one in office, crisis has been a constant companion of Finance Minister KN Balagopal. The Covid-induced economic crisis, steep fall in tax revenue and mounting administrative expenditure have given him challenges and he has taken them on with true sportsman spirit.
On Friday, Balagopal will present his second budget (the first full budget as the earlier one was a modification of the budget presented by his predecessor Thomas Isaac before elections). He took some time off his busy schedule to talk to TNIE about how the budget will revive the economy and create jobs.
Excerpts:
It is your first full budget and the people would be eager to know about your priorities. What would be the general approach?
The approach would be to make the economy lively through various measures. Emphasis will be on the knowledge economy programme to create quality jobs. We need to create more employment opportunities in the industries and service sectors. The government aims to revive the economy and make it more vibrant.
The state’s finances had already been stressed before Covid worsened the situation. Isn’t the idea of a vibrant economy a bit unrealistic in the current scenario?
Not just in Kerala, governments across the world are facing a grim economic situation due to the Covid pandemic and the evolving Ukrainian crisis. More and more problems are evolving, I would say. In addition to these, Kerala is facing a peculiar situation in which the Central government is arbitrarily reducing our share of funds. We need to face all these crises and economic development is the only way forward.
For that, we need to enhance production and create more jobs, thus facilitating the economy to grow independently and sustainably. We need to have programmes to boost industrial production and marketing using modern technologies. Priority will be given to sectors capable of providing large-scale employment like IT, ITeS, industries and agriculture. The new ‘work from home concept’ throws immense possibilities in the IT sector. A big intervention is planned in the agriculture sector to increase the earnings of farmers.
What are the financial challenges faced by the state due to the Centre’s policies?
First, the GST compensation system ends on June 30. Second, there is a considerable decline in the revenue deficit grant every year. This year, we are getting Rs 6,000 crore less than last year. Together, there would be a drop of Rs 15,000 crore in the new fiscal. It would become Rs 32,000 crore in the next fiscal.
The government has already announced plans to encourage wine and liquor production from local agricultural produce. Will the budget have measures for that?
I cannot reveal specific details. Still, out-of-the-box ideas are the need of the hour in developing value-added products and marketing. The government will not shy away from that responsibility.
Liquor and wine are among the possible value-added products. The government’s role is to facilitate technology and give assistance for more value-added products from the agriculture sector.
Successive governments have spoken a lot about investment-friendliness and industry-friendly environment. Will there be bold initiatives to make them happen especially since the government targets one lakh new MSMEs in the upcoming fiscal?
Definitely. There would be realistic programmes to encourage the industries sector, especially MSMEs. They will further help the state’s programmes in ease of doing business.
Will there be steps for resource mobilisation?
There have to be more resource mobilisation initiatives. Possibilities are limited but we will make some efforts without burdening the commoners.