Borrowing limit suffocating state: Old employment guarantee scheme should be restored: Kerala seeks economic package in central budget

NEW DELHI: Kerala seeks a special package in the Union Budget to bridge the resource gap of over Rs 21,000 crore resulting from borrowing restrictions. Minister K.N. Balagopal raised the demands in a meeting called by Union Finance Minister Nirmala Sitharaman ahead of the Budget.

There was a loss of Rs 17,000 crore due to the reduction in borrowing limit. The state also suffered a loss of Rs 4,250 crore due to the allocation method that deviated from the 15th Finance Commission recommendations. The old employment guarantee scheme should be restored. The central share in the schemes should be maintained at 75 percent. A compensatory cess should be introduced to offset the loss resulting from the GST reform. A separate GST-2 revenue protection framework should also be implemented.

Bharatmala at Vizhinjam port should be integrated with dedicated freight transport projects. Rs 1000 crore is needed to tackle man-animal conflicts. Additional loans should be given for infrastructure development and loans equal to the amount spent on national highway land acquisition. There are also demands like AIIMS and Sabari Rail.

Mineral sand reserves should be utilized

• Defense research and development corridor should be established by utilizing the state's defense assets
• Redefining tourism as a health/welfare and service sector. A plan should be developed to utilize the huge mineral sand reserves in Kerala
• Rubber-based engineering, food processing and marine value chains should be strengthened
• Special schemes should be announced to modernize MSME sectors. Special scheme for the elderly
• National skill mobility framework should be announced for returning expatriates
• AI-based health ecosystem to utilize Kerala's talent pool