Kerala’s finance minister Dr. Thomas Isaac presented the Left Democratic Front (LDF) government’s final budget for this term on Friday, 15 January 2021. The budget speech was considered especially crucial considering the need to counter the economic impact of the pandemic. It was also significant considering the upcoming elections in the State this year.
The Finance Minister emphasised the goal of transforming Kerala into a knowledge-based society, "with strides in modern employment opportunities and industrial growth while consolidating [the state's] achievements in the social sector." Employment was a key focus area throughout his speech with targeted schemes for various sections of the populations. Among the major announcements were ensuring laptops for all families, a Rs.100-increase in social welfare pensions, more jobs in the education section and more institutions and a Rs. 1000-increase in the allowance given to ASHA workers.
At a time when the issue of the Minimum Support Price has become a key site of struggle, the minister announced that Kerala will provide the highest MSP in the country for paddy farmers at Rs. 28/kg. Kerala, which is also the only State into the country to offer an MSP for vegetables, is looking at self-sufficiency in vegetable production too in 2-3 years.
The minister also announced that an additional 10 kg of rice will be provided at Rs. 15 to 50 lakh families which have blue and white ration cards.
A key highlight of Dr. Thomas Isaac’s speech was the success of the public sector in Kerala. PSUs and the public health and education sectors have seen major revivals over the past five years, according to the minister.
According to the Minister, the total receipts for 2021-22 are estimated to be Rs. 1,59,427.24 crore. The total budgeted expenditure for 2021-22 is Rs. 1,59,427.21 crore. Revenue deficit is estimated to be 1.93%, and fiscal deficit is estimated to be 3.5%.
The Economic Review that was released on Thursday highlighted the extent of challenges, especially the cumulative impact of a series of disasters including Cyclone Ockhi, two rounds of flooding in 2018 and 2019, and the Nipah and Coronavirus infections.
Just as in the case of the Indian economy, the economic slowdown affected Kerala as well. The state's economic growth rate in 2019-20 was lower compared to 2018-19, which adversely impacted tax revenues as well. The Covid-19 pandemic has meant a further contraction in economic activity across the world, and Kerala has been no exception. Hence the final revenue receipts in 2020-21 would be lower than last year's budget estimates.
But the Kerala Budget 2021-22 projects that revenue receipts would grow significantly in the coming year as the world, the country and the state recovers from the pandemic crisis, enabling a significant rise in the state's expenditure such as those on capital investments and welfare spending.
The Economic Review review noted that “the average rate of growth for the years 2016-17 to 2019-20 (5.4 per cent) was higher than the average rate of growth for the previous four years, 2012-13 to 2015-16 (4.8 per cent).”
At over three hours, the budget speech was the longest in Kerala’s history. The budget speech was punctuated with poems written by students from across the State that illustrated the points the minister was making.
Innovations need to be developed into products, which can be done through startups. Kerala is the top performer for startup promotion.
Matching grant to be given to startups which attract funding from outside the state.
International links of startups in Kerala to be developed.
Even amid COVID-19, 8 companies giving 2000 jobs each have started functioning in Techno Park, Trivandrum.
Rs. 22 crore for Technopark, Rs. 36 crore for Infopark, Rs. 12 crore for Cyberpark.
Kerala State Drugs and Pharmaceuticals Ltd has emerged as an alternative at a time when public sector industries are being privatised.
Productive capacity to increase to 250 crore rupees
A special park for cancer drugs will set up this year.
15 new formula drugs will be released and these will be exported to Asian and African countries.
Pharma park to be set up to manufacture bulk drugs.
The Kerala State Electronics Development Corporation Limited will be the backbone of the hardware revolution. Rs. 25 crore to be allotted for various KELTRON institutions.
Three industrial corridors are being planned.
These three projects together will cost around 50,000 crore and work will begin this year.
Kerala Rubber Limited to be started with 26% government share to produce value-added rubber products. Amul-model cooperative to procure rubber for the company. Velloor Newsprint Factory’s surplus land to be used for this.
Tourism has suffered a huge hit due to the COVID-19. To restore this, a sustained attempt is being made this year. A key focus will be on spice route projects.
Rs. 10 crore will be allotted for Trivandrum Heritage projects and Rs. 5 crore to encourage study tours such as those to Muziris.
Champions Boat League to resume in 2021-22.
Rs. 7 crore for Kochi-Muziris Biennale. Rs. 10 crore for other cultural fêtes.
Rs. 100 crore for tourism marketing, the highest ever.
The Minister switches to talking about schemes and jobs to ensure sustainable livelihoods. Throughout his speech, he has been quoting poems by students from across the State.
Rs. 7500 crore for schemes to support livelihoods.
At least 3 lakh people additionally to be given jobs under NREGS. The targeted number of work days will be 75.
For schemes to rehabilitate expatriates who are returning to Kerala, Rs. 100 crore will be allotted. This is especially important due to the massive job loss and migrant returnees due to COVID-19 and the changes in job laws in the Gulf countries
The Ayyankali scheme is a unique urban employment scheme. Rs. 100 crore has been allotted for the same. Another Rs. 100 crore for Ayyankali internship scheme.
3 lakh women are working in 70,000 sanghakrishi (group farming) groups in the agricultural sector. The number of such groups to be increased to 1 lakh.
Kudumbashree loans to production clusters such as Mari umbrella to be converted to shares.
Comprehensive mechanisation going on in coir industry. But this is being controlled through cooperatives, smoothening the transition and avoiding tensions.
Rs. 112 crore for coir sector, including for price fluctuation fund, and for mechanisation.
10 mechanised cooperative coir factories to be set up.
Rs. 52 crore and Rs. 105 crore for school uniform scheme. The school uniform scheme has been vital to revive the handloom sector in the state.
Rs. 16 crore will be allotted for khadi and village industries while Rs. 4 crore will be allotted for handicrafts and an addition Rs. 5 crore for Bamboo Corporation
Coir and Crafts Store to be set up by Kudumbashree in every panchayat. Each stall to be given Rs. 5 lakh interest-free loan.
In another vital intervention, Rs. 10 crore will be allotted for migrant workers’ welfare. Kerala has a huge migrant population and had won praise for engaging the migrant population during the COVID-19 population.
The next section is the elimination of poverty. Dr. Isaac says Kerala has seen the fastest decrease in poverty. The BPL population consists around 5 or 6% of total population, which is 4-5 lakh families
To lift them out of poverty, micro plans need to be formulated, targeting the poor families. The needs of each family have to be identified and resolved. They could be lifted from poverty permanently in five years.
Rs. 15 lakh on an average for each of these 4-5 lakh families!
100 fair price hotels have been set up in Kerala so far by Kudambashree.
Coastal development - Rs 5000 crore package was earlier announced.
Rs. 1500 crore to be spent in fisheries sector this year.
10,000 families to be given houses, including 7500 houses to be built by LIFE Mission.
Motorisation subsidy for fishing boats to replace kerosene engines with petrol engines.
As opposed to the Centre and other States, the Kerala government has allotted a higher proportion of money for sub-plans for SC and ST communities, the Minister says. Rs. 2750 crore has been allotted for the SC sub-plan and Rs. 781 crore for the ST sub-plan.
In 2021-22, 2080 crore rupees will be spent for housing for 40,000 families from SC communities and 10,000 families from ST communities.
The government has announced a comprehensive set of schemes for the disabled. BUDS schools for those with mental disabilities will be set up in 250 more LSGs.
Time-bound programme to turn Kerala into the first barrier-free state in India. All new buildings constructed with government money will have facilities for the disabled.
Over 600 crore is scheduled to be spent for the disabled.
And we’re back after the live blog was interrupted due to technical reasons.
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