Helps Finance Minister rein in revenue deficit, announce welfare measures

The most dynamic element of Finance Minister K.M. Mani's budget speech on Monday is the proposal to raise the retirement age of government employees to 56.

By doing so, he buys time of less than one year in paying the bill towards the career-end benefits to a large number of employees who were to retire together at the end of this month.

He had, obviously, approached the budget preparation exercise with a lot of trepidation. On the one side was the burgeoning revenue deficit and on the other side, the need to be seen as the budget of a government that holds aloft the slogan “development with social concern.”

This one proposal — raise the retirement age and hey presto, the funds appear — gave him the cushion to rein in revenue deficit and also announce a slew of welfare measures targeting the poor.

The basic figures: the revised revenue deficit for 2011-12 comes to Rs.5,658.28 crore, which means that much of borrowed funds too will be required to meet the day-to-day expenses of the government during the current year. Yet Mr. Mani announces new programmes causing an estimated outgo of Rs.1,118.66 crore, in addition to a loss in revenue of Rs.321.4 crore through concessions targeting weaker sections.

He does this through levies expected to bring in Rs.1,512.05 crore, restricting the borrowings too to a level he feels will take the State on its way to achieving the fiscal consolidation parameters set by the 13 Finance Commission.

The budget seeks to reflect the “progressive” side of the government first by its stress on infrastructure development. Allocations of Rs.150 crore for Kochi Metro Rail, Rs.50 crore for the proposed High-Speed Rail Corridor, Rs.20 crore for Thiruvananthapuram Monorail, and Rs.224 crore for the Vizhinjam port come in this category.

The budget is also trying to make a beginning in introducing modern technology to revive the State's sagging farm sector with proposals to encourage precision farming and greenhouse technology, set up rice and coconut bio-parks, and so on. The farm sector has been the weak link in Kerala's economy these past few decades.

And, to reflect the “social concern” of the government, the budget proposes token increases in almost all welfare pensions, besides programmes touching the welfare aspirations of a wide section of the weak.

The raising of the retirement age, over which young Opposition MLAs staged a slogan-shouting demonstration in the House for “betraying the young job-seekers,” is the thing that gave the Finance Minister the latitude in this budget.