Kerala Finance Minister K N Balagopal presented the revised budget estimates for 2021-22 as a second tranche of the vote on account that was earlier presented by the then Finance Minister Dr Thomas Issac. This is the 7th budget of Pinarayi Vijayan govt. Shri Balagopal announced that all the proposals in the earlier budget would be implemented.
In his Budget speech on January 15th 2021, the Finance Minister Dr Thomas Issac had indicated that the total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 1,28,730 crore, an increase of 38% as compared to the revised estimate of 2020-21. In 2020-21, total receipts (excluding borrowings) are estimated to fall short of the budget estimate by Rs 21,537 crore (decrease of 19%).
However in today’s budget speech, Finance Minister Shri Balagopal indicated a revenue inflow of Rs. 130,981.06 cr and a revenue expenditure of Rs 1,47,891.18 crore for FY 2021-22. The estimated revenue deficit is pegged at 16,910.12 cr.
But, analysts say that the revenue picture projected for FY 21-22 is far from rosy for a state that is dependent to a large extent for income from sale of liquor. Considering that 2020-21 had the revenue shortfall in 20-21 was 19% of the original estimate. The State Government from the past few years has been borrowing from the market to pay for salaries and pensions. This is a financial vortex where the state borrows fresh money to pay off the old money.
In today’s budget speech Shri KN Balagopal also announced a ₹20,000 crore COVID-19 revival package. But here again, it remains to be seen how much of this money is from the stimulus packages announced by Union Finance Minister Nirmala Sitharaman.
Shri Balagopal also announced steps to expedite coastal highway project, which has been in cold storage for years now.
The revised budget also proposed that Government Medical College Hospitals in Thiruvananthapuram and Kozhikode to have state of the art isolation facilities to treat transmissible diseases like COVID-19, ebola. Kerala has been able to maintain its presence in healthcare, but over the years, citizens, especially those who are well off have moved away to private hospitals, which have been mushrooming in the state.
There is also a proposal to set up expansive isolation wards to treat patients with transmissible diseases in all public hospitals. With emphasis on pediatric care, more intensive care units to be opened in hospitals. But here again, no specific amounts have been spoken about, nor budgeted.
The revised Kerala budget presented today also proposes an allocation of ₹50 lakh as seed money for the proposed Centre for Disease Control, but that it too meager an amount to be spent on a highly specialized institution like a CDC. The expectation is that the Kerala State Govt will approach KIFBI or other financial institutions to borrow a couple of crores to complete the procurement of equipment and annual salaries for the staff.
There is also a comprehensive package to prevent coastal erosion and mitigate the damage caused due to sea surge. Here again, the gap between intent and action is missing and it has been seen from the previous administration that most of this remains on paper.
The settlement of outstanding rubber subsidy dues that has been proposed is again only an intent as there is no amount mentioned and what would be disbursed and when.
There has also been a ₹10 crore allocation for eradication of extreme poverty and here again, the amount seem to be just a token one, which will be a proverbial drop in the ocean.
Today’s budget speech also has the proposal for five agriculture processing parks in Kerala. While this is a welcome move in a state that is blessed with favourable weather conditions, the inability to give farmers a remunerative price has resulted in the fruits like Pineapple being simply sold at distress prices. The Govt of India has initiated a number of Food Processing projects and I suspect the state of Kerala might be hoping to get a few grounded in the state. One needs to revisit this sometime later in the year and see if there is any action on the ground.
Two lakh laptops for students is another promise that will require huge amounts of funds. Will it really happen? A back of the envelope calculation shows that the state will need 500 crore rupees to make this possible. Since no budget has been allocated in this case, the Kerala State government will have to tap into CSR funds of corporates or wealthy individuals to donate these laptops.
The budget also talks of a move to revive the tourism sector. The Kerala State Financial Corporation would extend ₹400 crore as low-interest loans to help revive the industry and restore lost jobs. This again is too little, too late.
An amount of Rs ₹4 crore has been allocated to set up monuments for veteran politicians and former Ministers K. R. Gowri Amma and R. Balakrishna Pillai. It’s an irony of sorts that CPI M led government wants to honour Gowri Amma, who was vilified by the party and denied her right due – when she was alive.
All in all, this revised budget does not have much to talk about, as it was presented just four months after the last one. The statement of the Finance Minister that the Kerala State government would not cut down any expenses, but would borrow more, if required, smacks of someone playing a game of monopoly, without any real cash in hand. One thing is for sure, Kerala is staring down a deep abyss. No one knows when it will hit the bottom.