Kerala has to learn lessons from the Sri Lankan crisis, says FM Balagopal

There is good demand for fruits like dragon fruit, mangosteen, and rambutan. Hence, diversification of crops will earn more income to the growers, he said.
Finance Minister K N Balagopal. (File Photo | Vincent Pulickal)
Finance Minister K N Balagopal. (File Photo | Vincent Pulickal)

THIRUVANANTHAPURAM: The financial crisis in Sri Lanka gives some serious lessons to Kerala as the island nation has similarities with the state in so many aspects, said K N Balagopal, Kerala finance minister.

Inaugurating a panel discussion on Kerala budget and Economic Survey report, 2022, jointly organised by Gulati Institute of Finance and Taxation (GIFT), Department of Economics, University of Kerala, Center for Budget Studies, CUSAT, and Kerala Chapter of Confederation of Indian Industries (CII) here on Friday, the FM said that Kerala has to give more thrust to primary sectors like agriculture as there is a serious shortage for food items in Sri Lanka.

Shortage of food items there is the outcome of the neglect of agriculture for decades and their focus was mainly on services sectors like tourism and hospitality. "Production of basic agricultural products is imminent in any model of economy. This is the lesson Kerala has to learn from crisis in the island nation," he said.

Balagopal said that the latest state budget mainly focuses on two important aspects of agriculture. Increasing agri-production is the main focus of the budget proposals. Value addition and marketing is the next step and the government proposes to form a new company for marketing along the lines of Cochin International Airport Ltd. A sum of Rs 100 crore is earmarked for the initial expenses of the company, he added.

The minister also said that diversification in plantation crops is very vital for the agriculture sector of the state. Kerala's plantation sector is planting the same crops for more than 200 years together. This style of production should be changed according to market needs. There is good demand for fruits like dragon fruit, mangosteen, and rambutan. Hence, diversification of crops will earn more income to the growers, he said.

The FM said that during the next five years a total sum of Rs 131,000 crore would be spent on highway development in Kerala. The state had earned commendable progress in tax collection, this year. Total collection will be to the tune of Rs 58,000 crore as against Rs 47,500 crore last year. The government expects a much higher tax collection as the expenditure on infrastructure will turn out to be a much wider tax base.

Earlier, Prof. V.K. Ramachandran, vice-chairman of, the State Planning Board inaugurated the day-long discussion on the state budget and Economic Survey Report. He said that the Kerala model of development worked as a springboard for Kerala's development and higher standard of living especially in the case of education and healthcare.

"Covid pandemic had badly hit the growth of the Kerala economy. But the timely intervention of the state government had reduced its impact considerably. The decline in revenue from GST and compensation from the Union government had affected the fiscal position of the state badly," Ramachandran said.

The state had guided the nation in the planning from the bottom level and decentralisation of powers said eminent economist Prof. M.A Oommen. He said that the earmarking of 35 per cent of the total plan funds to local bodies in 1996 in Kerala was a landmark incident in decentralised planning in the country.

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