A Budget that invites predicament

Economists and other hotshots always echoed the opinion that Kerala's financial situation is passing through turbulent times. Without batting an eyelid at these statements, the finance minister of Kerala K N Balagopal began his Budget presentation by saying that the state is free from the economic shackles and is doing a commendable job. He further warded off all the opinions of experts as canards.

Many expected the budget to hike the welfare pensions for elders but the minister had other plans. Even media houses aligned more with the left party made prophetic calls yesterday regarding Balagopals Budget, but the minister awed everyone with a relatively shoddy budget. The decision to not hike the pension will see big opposition in the coming days. The sole thread of the Kerala budget was to equally distribute the minimal money available in the state coffers to all strata of the society. This itself is a gaffe of a move according to many experts in the financial milieu.

Fuel prices will see a hike from April of this year. A social security cess of Rs 2 per litre is placed on both petrol and diesel. Even now the public is teetering on the edge finding it difficult to meet the demands of the rising fuel prices. An additional cess onto it is more akin to adding salt to injury. It is an open secret that inflation in India is mostly the result of higher fuel prices. If Kerala is keener to make the fuel prices go over the roof, then it is like inviting a calamity to an already bedridden financial state.

Due to the hindrance of GST, the state can't increase the price of commodities of any sort. To bypass such an obstacle, the government is seeking other ways of comfort through hikes in fuel prices and even Liquor prices—the sole elixir that helps the state revive during testing times.

The budget promoted low-cost prefab technology in constructing new bus stations. Following the success of such a bus station in Kottayam government have decided to allocate Rs 20 crore for the construction of similar bus stations in Vizhinjam, Attingal, Kottarakara, Kayamkulam, Kannur, Kasaragod, Ernakulam, Thrissur, said Balagopal. The road transport sector gets an allocation of Rs 184.07 crore while the Motor Vehicle Department gets Rs 44.07 crore.

The government has reached the threshold for loans so the spending henceforth will be a Tightwad affair. Unwanted spending will be curtailed short, insisted the finance minister as the government looks to alter course from the gordian knot of financial distress.

Some of the highlights of the budget are a Rs 1,000 crore industrial corridor to tap the emerging business potential around the upcoming Vizhinjam international seaport; Rs 600 crore price support for rubber farmers; Rs 2,000 crore for market intervention to arrest inflation and a ‘Make in Kerala’ scheme for promoting domestic production and entrepreneurship.

While ending his long monologue, the minister tried some words of wisdom saying the budget is not just a play of numbers, and he insisted the people should look more into the approach adopted by the government. Nevertheless, the people of the state are fastening their seatbelts to endure a difficult season with high rises in taxes. The Budget had nothing for the people, and the additional cess to fuel will see turmoil in the coming days.