Mani may find additional tax revenue quite handy
The Union Budget for 2013-14 will prove to be a mixed bag for Kerala.
Politically, there is nothing much Chief Minister Oommen Chandy or Finance Minister K.M. Mani can do other than issuing statements welcoming the budget proposals presented by Union Finance Minister P. Chidambaram.
This is because several of Kerala’s infrastructure investment projects touted as game changers have been bypassed in favour of similar proposals elsewhere in the country. And whatever has been allocated appears to be quite insufficient.
The devolution of additional tax revenue to the tune of Rs.1,303 crore is something that Mr. Mani will find quite handy while preparing his budget to be presented in the Assembly on March 15.
It will enable him to short cover the huge expenditure on subsidies to various sectors, including market intervention to hold the prices of essential commodities down.
Mr. Mani is not optimistic about the gains on this count as he feels it will be offset by the higher expenditure caused by inflationary pressures. It can at best be a notional advantage.
The other positive points in the budget include Rs.75 crore for reviving coconut cultivation and Rs.130 crore for Kochi Metro, which includes Rs.100 crore as the Centre’s equity component.
The allocation for the Kochi Metro Rail will infuse the much desired momentum to the flagship infra project. The higher allocation for agriculture loans, with a level-playing field to private scheduled banks, is also sure to help Kerala given the fact that these banks, despite their strong presence in the State, have been outside the purview of interest subvention given on farm loans and the Kisan Credit Card scheme.
The State government is unhappy that the Vizhinjam International Deep-sea Container Terminal did not get the kind of consideration that the Tuticorin port has received.
There is a strong feeling that the Union Budget has overlooked Kerala’s demand for an industrial corridor connecting the State to Bangalore via Coimbatore, even while making budget provisions for the Mumbai- Delhi-Chennai- Bangalore Industrial Corridor, it is pointed out.
The State government is happy that its persistent demand to allow Non-Resident Indians returning home to bring higher quantities of gold has been finally conceded.
Certain proposals such as setting up a regulatory authority for road development are likely to have a negative impact on Kerala, which has been witnessing agitations over land acquisition for road development.
The proposal to establish exclusive women’s bank is also looked upon positively given the strong presence of women in the micro-finance sector.
The higher allocation for health, education, and the Scheduled Caste and tribe welfare is also likely to rub off on Kerala. The proposal for a skill development scheme for youths, it is pointed out, does not match the scheme announced by Kerala last year.