Kerala Budget: Positive policy change

Finance Minister KN Balagopal has presented the state budget for 2024-25 within the constraints of a debt-ridden government. Therefore, there were very few big announcements and promises. It is a very difficult task to allocate the available revenue to the various departments in such a way that there is no room for grievances. Despite the criticism that the budget did not live up to the expectations of the people, the finance minister has tried to distribute the resources that could be collected in a fair manner. Another characteristic of his fourth budget is that it does not invite much criticism.

The most noteworthy thing about the new budget is the change in the government's policy in some important areas. The move to significantly encourage private capital investment is sure to boost the growth and progress of the state. It is good that at least now the government felt that it would take a lot of effort to overcome the losses caused by its hesitancy. The decision to welcome private investment in industry, education and health sectors will yield positive results. Welcoming foreign universities in the field of higher education and granting permission to their campuses is enough to control the flow of Malayali children abroad to some extent. It is the outdated approach followed by our universities that forces children to leave here and go abroad. Many universities abroad provide opportunities to work alongside studies. In the last academic year, more than 70,000 seats were vacant in arts and science colleges of the state. So many graduate seats are vacant because those who do not want to go abroad are looking for quality colleges in other states.

Along with permitting foreign university campuses, a way is also being paved for private universities to come into the state. The mistake we made was that we stuck to the position that such reforms are not needed in Kerala. It was difficult for us to accept this even when private universities in other states were functioning at the best standards. Perhaps one of the most glaring proposals in this year's budget will be this core policy change related to the higher education sector.

When the government does not have enough money to invest, the approach should be to rely on private capital as much as possible. If we stand against everything with our fake philosophies, we will not know about our foundations weakening right under our feet. The budget also includes proposals to attract more private investment in the industrial and health sectors. Structural changes in the approach to development finance will stimulate the economy. It will help to take the state forward on the path of development. Kerala's growth was stunted due to a lack of innovation in agriculture, industry and infrastructure sectors. The finance minister also aims to enable investment of three lakh crore rupees in the remaining three years of this government. Policy approaches will change accordingly. With the Vizhinjam port becoming a reality this year itself, the Vizhinjam-Navaikulam corridor will open endless possibilities. Regional development can also be ensured through the development of small and medium ports.

The high position achieved in the health sector will help make the state a medical hub and attract a large number of foreigners. Special Development Zones, special development projects of 4000 crores centred in Kochi, and National Highway development will benefit the state a lot. Another interesting aspect of the budget is that it will create a special fund for the renovation of public schools by accepting donations from alumni. It can be a great asset if implemented responsibly and reliably. The proposal to collect funds from the public for the development of government hospitals can also be tried to be implemented in a positive way. Many of the government hospitals depended on by common people are functioning without even adequate basic facilities. Such matters do not receive much consideration in budget allocation either.

It should be understood that although it was generally expected that there would be an increase of at least one hundred rupees in the Social Security Pension, the severe financial crisis did not allow the finance minister to do so. Moreover, a huge amount has to be found to settle the pension arrears of five or six months. The Finance Minister is ready to pay one instalment of DA in April in the context of government employees and teachers going on strike over arrears of dearness benefits. There was no mention of the appointment of a new pay commission. It can be assumed that the government has been influenced by the expert opinion that the salary revision once in five years puts an undue burden on the state exchequer. If so, that is also a good step. As the industrial environment in the state has improved, efforts should be made to bring in more investment. As part of encouraging the private sector, the budget announcements have sanctioned 25 private industrial parks, more food processing units, development zones on the Chinese model and more start-ups.

The finance minister aims to mobilize additional resources of a total of Rs 1067 crore for revenue enhancement. For this, the sectors of liquor, land, court fees and river dredging will be mainly depended upon. The fair value of land is set to increase further. Already land sales have plummeted due to unfair pricing. There has been a significant decline in registration revenue during the current year. Those living in flats will also be forced to pay land tax from now on. Despite all this, additional resource mobilization is limited to 1067 crores. The additional cost is estimated to be Rs 1420 crore.

The increase in the support price of rubber by ten rupees will only make the rubber farmers laugh. Revenue income is expected to be Rs 1,38,655 crore, while expenditure is expected to be Rs 1,66,501 crore. There is no indication of how the arrears will be paid with the Center restricting the ways of borrowing. From cooks to contractors are waiting to get their dues.

The finance minister says that his budget will disappoint the anti-Kerala people, even though he blames the Center for the financial crisis. This reflects his satisfaction and comfort with the priorities in the budget. It can also be seen that the finance minister tried to increase the allocation to each department, albeit nominally, without entering into controversies. In the budget, there is an announcement of a new scheme to replace the participatory pension scheme, which government employees have been demanding for a long time. A committee will be appointed for this purpose. The committee will also study the new pension scheme in other states and submit the proposal.