The Union Budget proposals have failed to enthuse the government that was expecting discernible solutions to mitigate the impact of demonetisation on the State’s economy.
Right from raising the borrowing limit to 3 or ideally 4% of the GSDP for increasing capital expenditure to enhancing the allocation for the Mahatma Gandhi National Rural Employment Scheme to providing 100 days employment for all registered job seekers, the State has been expecting a slew of proposals that will help bring out the economy from the crippling impact of demonetisation.
Finance Department sources told The Hindu that the current allocation of ₹ 48,000 crore for the MGNREGS was too inadequate to prop up the rural economy that was bearing the brunt of demonetisation. Asset creation and employment generation might not take off. This would also have its impact on the announcement to increase women participation and also complete 10 lakh farm ponds by March and take up the work on another five lakh ponds during the next financial year.
Moreover, the proposal to integrate the primary agriculture credit societies (PACS) with the core banking system of the district cooperative banks in three years is being construed as a bid to infringe on the functional autonomy of the former.
The PACS that currently function as the pivot for financing the rural economy for supporting small and medium farmers and traders may be reduced as the business correspondents of the district banks.
The curbs on withdrawals have already reduced their significance and, if implemented, the latest proposal will put their functional autonomy at stake. Corrective measures to ease the functional problems being faced by the cooperative banking sector post demonetisation too are sorely missing.
Unlike other States, Kerala’s cooperative sector has a dominating presence in all walks of life and, hence, proposals for sustaining its significance are crucial for the State, the sources said.
Yet another major grouse is the cut in the allocation for the Urban Renewable Mission from Rs. 9,559 crore to Rs. 9,000 crore. This step is feared to dash the expectations for having two smart cities in Thiruvananthapuram and Kochi.
The refusal to raise the borrowing limit as desired by the State has capped all the expectations for raising the capital expenditure, especially in the time of a financial crisis.
