THIRUVANANTHAPURAM: The Union Budget for 2006-07 presented in Parliament by Finance Minister P. Chidambaram on Tuesday evoked mixed reactions in Kerala.

Talking to The Hindu , Chief Minister Oommen Chandy said Mr. Chidambaram had succeeded in enhancing the support to social sectors without levying any new taxes. This was no mean achievement, he said.

Mr. Chandy said the State's ailing tea industry would benefit from the Budget proposal for setting up a Rs.100-crore fund for rejuvenating tea plantations in the country. He also welcomed the move to develop the Rajiv Gandhi Centre for Biotechnology in Thiruvananthapuram into an autonomous institution of excellence.

He said though proposals specifically benefiting Kerala were few, the State hoped to gain under the overall policy direction set by the Budget in the matter of infrastructure development, Mr. Chandy said. Central support might be forthcoming for the Vizhinjam International Container Transhipment Project, Kochi Metro Rail, Kannur Airport and the Chamravattom Irrigation Project, he said.

Former Vice-Chairman of the State Planning Board V. Ramachandran said that there was nothing "earthshaking" in the Budget. He said that, within the constraints imposed by the [political] compulsions to retain subsidies and social support mechanism, this budget continued to take the country forward in the direction of reforms.

Economist K. N. Harilal said Mr. Chidambaram's Budget had meted out the same treatment to Kerala as the Railway Budget and the award of the 12th Finance Commission. Kerala did not figure in any of the special programmes.

He said the biggest problem being confronted by the State was the vulnerability of the prices of its agricultural commodities under the neo-liberal economic policies being pursued by the nation. This Budget did not attempt to address this problem even in a small way, he said. Mr. Harilal noted that Kerala's economic growth was service sector-oriented. However, the growth brought little relief to the fiscal difficulties of the State Government since the Centre reserved the right to levy service tax without sharing the revenue received from the sector with the States.

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