KOCHI: Finance Minister T.M. Thomas Isaac said here on Monday that the State government planned to raise spending on infrastructure development to five per cent of the State Gross Domestic Product (SGDP) by next year from the current one per cent.
Dr. Isaac was speaking after fielding questions at the inaugural session of a seminar on the current global financial crisis organised by the State Bank of India Staff Union, Kerala Circle.
During the question-answer session, the Minister said, “We will raise money and spend it” on infrastructure development.
Undertakings such as the Kerala Water Authority, Infrastructure Kerala Ltd. (InKEL), the Roads and Bridges Development Corporation, the Fisheries Corporation and so on would be allowed to raise money through borrowings.
This was among a slew of measures being initiated by the government to combat the effects of the global financial market meltdown.
Dr. Isaac said the balance sheets of some of these institutions such as the water authority would be cleaned up.
He warned that Kerala would not be insulated from the effects of the global crisis, and said the government should do what it could to improve the income levels of the people and provide social safety nets.
He said the proponents of the theories of Milton Friedman, economist, had put aside those and were now hankering for government intervention. Even in this scenario, the government in India was unwilling to orient its policies towards the welfare of people. While the government was willing to fund banks in trouble, it was not willing to spend money on building infrastructure.
He said his government would ensure that tax receipts were improved substantially, and declared that the government was receiving just half the tax it really should get.
A concerted effort would be made to improve tax receipts. A brainstorming session of tax officials being organised at the Town Hall here on Tuesday was aimed at this, the Minister said.
If Kerala had to brace up for the effects of the global crisis, it had to ensure that the government had money to spend.
The Minister said the State government had been trying to get Union government approval for opening ‘Pravasi Chitties.’
The Reserve Bank of India had raised some objections to floating it. These included the lack of familiarity of Reserve Bank authorities with ‘Chitti,’ which continued to be a big draw with NRI Indians, Dr. Isaac said. Another objection was these ‘Chitties’ would be used for money laundering.