K.M. Seethi
The Budget presented by Finance Minister K.N. Balagopal is a repertoire of the development vision and activities of the Left Democratic Front (LDF) government, as well as its short-term and long-term strategies for achieving them.
But the Minister himself raised questions about the reconnoitre capability of the State in terms of assessing expectations and reality in an unpredictable, if not uncharted, development terrain.
With the onset of a series of setbacks starting with the introduction of the goods and services tax (GST) regime, demonetisation, shortfalls in fiscal federalism, two spells of natural disasters (in 2018 and 2019), the COVID-19 and, eventually, with the outbreak of the Ukraine war, the long-term prospects for the Kerala economy are anything but comforting. Yet, there is a silver lining to the document. That is obviously palpable in the new schemes put in place in a wide range of spheres, from higher education to information technology, from health to agriculture, industry, fisheries, cooperatives.
Plausibly, a major crisis for the government today is how to negotiate the challenges of a neoliberal regime (superimposed from the Centre as well as from international financial institutions), the recessionary trends emerging from the global economy and the interventionalist developmentalist/welfare agenda of the State.
Amid the burgeoning Budget deficit and escalating State debt, the success of the government lies in its approach that we cannot keep ourselves embedded in a fear-psychosis mode, but look forward to the future with all liabilities in hand. This is what the Finance Minister inherited from the ‘Isaac magic’.
Former Finance Minister T.M. Thomas Isaac had little hesitancy in telling you openly that ‘money is not a problem’ in any development project. In fact, his conceptualisation of the Kerala Infrastructure Investment Fund Board (KIIFB) — which modelled a business-as-usual schema — was instrumental in infusing confidence in ‘doing business’ in all sectors of society and the economy.
Admittedly, Mr. Balagopal’s Budget speech has given indication, very specifically, that all major development projects, including the higher education/knowledge economy infrastructure, have a circuit trail of the KIIFB, no matter “how and who” should ultimately shoulder the long-term liabilities, by way of interests and repayments.
The Budget aims at significant changes in the higher education sector with a view to ensuring that the pay-offs of research “should be beneficially utilised for the productive sector of the State. “When Mr. Balagopal says that the quality of higher education “should be enhanced to be beneficial for practical life rather than confining it to mere academic circles,” he gives a message that universities and research institutions should be cost-effective and be incentivised for their output in terms of ‘production’.
The proposal for “translational labs and incubation centres that promote entrepreneurship” is a clear indication of the direction in which universities will have to traverse. Some of these things certainly follow the growth trajectory of the Union government. But it is not clear whether the State will fall in line with the National Education Policy (NEP) 2020, which emphasises multidisciplinary universities, colleges, and liberal arts programmes.
One can very well understand the opportunities in setting up IT hubs, science parks, etc. in an ecologically fragile State such as Kerala, where one cannot afford to have big industries that have the potential to ruin its ecology. However, when the “knowledge economy” is emphasised with the goal of increasing “value-added production of the State and its domestic income,” we can’t be sure if liberal arts and multidisciplinary programmes will have to follow the dictum, “survival of the fittest.” The new Budget is silent on the survival of many universities and institutions of higher education where one can find persistent disproportional allocation between science, social science, and humanities. This can be seen in the sanctioning of new programmes and courses.
The Budget is undeniably in line with the thinking that there should be strong government intervention in diverse areas of the economy affected by the global recession, pandemic, and return migration. Hence, the highest priority accorded to sectors shattered by global reversals is a silver lining.
Though the allocation for containing inflation and ensuring food security may not be sufficient, it’s a worthy beginning in terms of State intervention, as in the case of subsidies being offered to rubber cultivators. The State’s productive sectors have huge potential to grow, and we have sufficient manpower and technology to manage them. But the most challenging task is how to generate capital, to invest in vital sectors, and to ensure proper marketing.
With the KIIFB in hand, the present government seems to have enormous confidence in going forward. It is also a welcome move to diversify the market strategies (including in cooperatives), keeping in mind the vibrant sectors at the local level.
(K.M. Seethi is ICSSR Senior Fellow and Director, Inter University Centre for Social Science Research and Extensions (IUCSSRE), Mahatma Gandhi University).
