Walking the talk to be test of dream Kerala Budget

However, these projects are supposed to be funded by KIIFB whose budget is beyond the purview of legislative oversight.

Published: 12th March 2022 06:23 AM  |   Last Updated: 12th March 2022 06:23 AM   |  A+A-

By Express News Service

A number of projects and schemes that are aimed at the educated unemployed is a major hallmark of this first full budget of Finance Minister KN Balagopal. New initiatives in higher education and linking it to economic activities is welcome. But we all know that the taste of our idli is in its eating. And hence the challenge is in implementing them in a time-bound manner. It is also important to ensure that these projects are viable so that they don’t become a burden on future exchequer.

However, these projects are supposed to be funded by KIIFB whose budget is beyond the purview of legislative oversight. This exposes the sorry state of affairs of the government to undertake development project through the budget. Had the government been determined enough to collect all taxes and non-taxes that are due, this would not have happened. The tax collection efficiency was Rs 12.4 for every Rs 100 in 1975-86; it declined to Rs 8.2 in 2016-17 and Rs 6.5 last year. Where is the political will on this issue?

It would have added to the credibility of the finance minister and his government if he had given a report on the state of the projects announced during the last five years or so. The people are entitled to know what is the progress in Rebuild Kerala Initiative for which the government has secured external loans. External loans can be justified if it involved import of technology or know-how that is not available in the country. Otherwise, it will result in a net transfer of our incremental output to outside world.

The new tax hikes are a mere cosmetic change going by the additional amount expected, i.e. around Rs 630 crore. Instead ,he could have taken the initiative for progressive taxation by a higher tax rate, for example, on luxury vehicles and other luxury articles of consumption. He could also have thought about a comprehensive carbon tax. But here again, the question of tax collection efficiency would raise its head.

We often hear the glib talk of justifying public sector losses in the name of their social function. What are these social functions? Measure them and compensate them as budgetary subvention. And then ask them to function efficiently and give a reasonable return. The persistent loss of public sector enterprises is a drain of public resources and a burden on the common people. At around Rs 2,500 crore of net annual loss of public sector enterprises, the state has witnessed a drain of Rs 15,000 crore in six years. I hope it is not inappropriate to ask the minister as to what has happened to the recommendations of the Sushil Khanna Committee to rescue and revitalise the crumbling KSRTC. It would have lent credence to his allocation of Rs 1,000 crore to the entity from the public exchequer.

I am sure there are a number of positive aspects and initiatives that would take time to reveal. However, I must say the one that touched me deeply is the decision to give milk and egg to pre-school children twice a day. This kind of social care is certainly a bright spot in an otherwise dark cloud of debt-driven public finance journey of Kerala.

K P Kannan 
Economist & honorary fellow, Centre for Development Studies, T’Puram


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