White Paper is out, let the reforms begin

Devoid of any politics, the white paper tabled in the assembly yesterday by the UDF government gives a wider financial picture that the money remaining for development is limited. Another worrying fact is the increasing debt burden on the state. Ten years ago, when the first Pinarayi government came to power, the state's debt was Rs 1.57 lakh crore. According to the figures in the white paper published yesterday, the debt is currently Rs 5.07 lakh crore! The difference in the debt in ten years is fourfold! The economics of expenditure are simple - expenditure should be made according to income; new ways of generating income should be sought according to expenditure; borrowing for development and repayment of debt from the profits! The figures in the white paper show that the former government failed this simple formula.

When the Chief Minister alleged in the Assembly a few days ago that the governments of the last two terms had shown serious indiscipline in financial matters, former Chief Minister Pinarayi Vijayan responded, “Don’t try to threaten us with this white paper drama” But Yesterday, the same Pinarayi departed from his former haughty response, saying 'Have all these figures been verified?'

Dr Thomas Isaac, who was the Finance Minister in the first term of Pinarayi's government, had a different question: 'Why didn't the Centre criticise for tax evasion?' The Finance Minister of the second term, K.N. Balagopal, took out a 'secret' behind the UDF white paper and revealed it - 'A shortcut to get support for the privatisation that the right-wing government is planning to implement!' Apart from this, for some reason, not a single voice from the opposition alleged the white paper to be fake, which speaks volumes.

According to the White Paper, 77 per cent of the total revenue income has to be spent just to pay the salaries and pension benefits of employees! Another 17 per cent is required as interest on loans. When this is added, the total liability will be 94 per cent of the revenue income! The remaining six per cent has to be brought in for the touted development project. According to the national average, only 46.1 per cent of the total revenue income is compulsory expenses, including salaries, pensions and debt repayment, so the economic stunt that Kerala made last year on the back of development is shocking.

While 63.5 per cent of the revenue income is spent on development activities at the national level, according to the 2024-25 estimates, we spent only 39.9 per cent. Former Finance Minister K.N. Balagopal said that the level will increase when the development implemented through KIIFB is also included.

The white paper also includes an estimate of the debt burden faced through the same KIIFB alone - Rs 21,000 crore. The white paper alleges that the lending agency operated as a parallel government system under the Left government. If the true picture of the figures in the name of KIIFB needs to come out, it must come under the purview of the inspection agency. Although there have been many infrastructure developments implemented through KIIFB in the state, accurate figures are needed regarding the utilisation of the funds. It is a good sign that the white paper says that the activities of KIIFB will be revamped and used for the implementation of profitable projects. Because KIIFB, also known as the 'Kerala Infrastructure Investment Fund Board', was formed in late 1999 to raise money mainly for infrastructure development activities, and is the first agency in the country to be conceived in this way. The decision to reform it in a positive way rather than rejecting it is entirely welcome.

When the Left government was removed from power, it claimed that it was leaving Rs 6,000 crore in the treasury. Revealing the secret of that statement, Chief Minister V.D. Satheesan, who is also the Finance Minister, told the Assembly yesterday that the story is not only interesting, but also has a mysterious 'alchemy'.

What if a government employee with an average monthly income of Rs 500,000 does not fulfil any of the household expenses that must be paid at the beginning of the month, but hands that amount to his wife and brags, 'Hey, I have Rs 500,000 in my hand'? The white paper also lists the major items that the previous government did not pay for. The salary arrears of government employees alone are Rs 21,670 crore, the famine allowance arrears are Rs 14,307 crore, and the bill discount to banks and contractors is Rs 3,431 crore. The white paper also says that when other deferred liabilities are added, the total outstanding amount will be Rs 48,733 crore. This amount is said to be equal to the state's one-year debt.

It has not been a month since the new government took office. Any government, regardless of whether it is left or right, will play the politics of placing all the burden of financial responsibility on its predecessors. Their government will gain applause by promising to maintain financial discipline and solve all the problems. But it is the new government that needs to prepare a long-term action plan for economic management based on the facts in the white paper that has just been presented. The retirement age of government employees should be increased, promoting privatisation, making public sector enterprises profitable, and merging and empowering some departments are among the expected reforms from the government. The common people wish that this government carry the determination and strength to fulfil those expectations. The development of the country, economic stability, and the welfare of the common man should stand out above all politics.