Finance Minister T.M. Thomas Isaac reveals in this interview with The Hindu , the State’s plans to use the COVID-19 fight as a window of opportunity to set up agriculture processing industries and pharma consortiums.
On the distress relief package
Primarily, it’s a health crisis with a big economic fallout. We have done well so far to contain the spread of the infection. But we will wait till April 13 to gauge the situation as we are on the side of caution and do not want to do anything that might undermine our accomplishments in containing the spread. We don’t want to risk a community spread, whose consequences can be terrible. Therefore, it doesn’t matter what’s the cost involved in flattening the curve.
That said, for a lockdown to be effective, people must comply with it and actively participate in the process. That can only be done if we meet their bare minimum requirements like food and some money to buy essentials. This is paramount and we have seen how lakhs of migrant workers took flight undermining the logic of quarantine when this minimum need was neglected in the rest of India.
That’s why we rolled out a distress relief package early on to instil confidence in the people that this battle can be won. We have paid ₹8,500 each to some 55 lakh individuals — and they include senior citizens, widows, the differently abled etc — from around 40 lakh households who are beneficiaries of various social security payments. Every member of welfare funds that cover the labourers and the self-employed except farmers is going to be given amounts ranging from ₹1,000 to 5,000. That process has begun. In the third stage, we will also be giving ₹1,000 each to households that have been left out.
Alongside, we’ve supplied minimum food, kits worth ₹1,000 containing three types of pulses, oil, sugar, tea etc and 15 kg of rice to each household regardless of income status because Kerala is a chronically food deficit State and all are equally affected by the lockdown.
To provide daily meals to street dwellers and destitutes, we opened up about 1,300 community kitchens from where four lakh meals are delivered to people daily. A great number of volunteers are involved in this and we are thinking of recruiting a volunteer force at the ratio of a volunteer for 100 people. The process is on.
On the lockdown exit strategy and economic revival plan
It’s a situation where the supply chains have also been severed. Therefore, we are carefully working on a plan and agriculture would be the first sector be eased from the lockdown. Kerala has relatively small parcels of agricultural land and we are already encouraging kitchen gardens. But that will now have to be expanded to other crops because it’s possible to continue social distancing while doing farming except in certain segments.
But to do that, we will have to have a moratorium on farmers’ debt. We may have to subsidise farming to kick-start production. This is also the time for Kerala to bring in agriculture processing industries where we are woefully behind. We could start by asking cooperatives to start procuring coconut and then, to set up processing units.
Further, cottage industries like coir where spinning is done in households can restart. Self-employed sectors can also resume.
Then you have sectors like tourism that will take a long time to be normal. There’s no way it can be reopened in the next three or four months. Foreigners should have the confidence to come here. You have to strategise in the long-term. But we intend to start a campaign right away, after the lockdown is over, showcasing a resilient Kerala. Showing how we have tackled COVID-19. Tourists who were stranded here have been moved to their countries in special flights.
There have been glowing tributes coming our way. We put the travellers in good hotels, gave them the best treatment; many were suffering from other medical conditions and they were all amazed by the health services we have. So, this is to welcome them when we open up after the rains, in September or during the boat race season.
Meanwhile, we are sitting with all stakeholders to draw up a plan and hopefully in three months, the economy should be out of the lockdown.
Healthcare industries to take the lead
The industries that will lead the post-lockdown stage will be those contributing to healthcare. The public sector Kerala State Drugs and Pharmaceuticals Ltd (KSDP) is expanding in terms of infrastructure and capacity. A small company with a turnover of about ₹25-20 crore, it will have manufacturing capacity worth ₹250 crore by the year-end. They are just waiting for licence for mass production of medicines needed by patients going for organ transplant. If the daily cost of their pills is ₹250 outside, the facility can produce them at ₹30 or 40. We also intend to form a pharma consortium with private sector participation for production of drugs and medial devices.
The only problem in medicine manufacture now is the non-availability of chemicals as pharma companies are all dependent on Chinese supplies. Hopefully, in a month or so, the supply lines will be reactivated.
We are encouraging start-ups to collaborate with research institutions like the Rajiv Gandhi Centre for Biotechnology, which has produced rapid test kits, and the Sree Chitra Tirunal Institute of Medical Sciences and Technology, which has come up with oxygen masks for patients with less-severe respiratory issues.
KSDP already manufactures one lakh litres of half-a-litre sanitiser bottles daily. This will be further enhanced as also production of masks by self-help groups as these are going to be in demand once out of the lockdown. We are going to make masks compulsory in public spaces then.
We are gearing up to meet all emergencies by adding one lakh beds and a PSU in the coir sector has been asked to make 50,000 of them. With more ventilators, test facilities, kits and cleaner hospitals, we are going to have a far superior public health infrastructure at the end of it.
Centre pushing States into debt trap
While the States are on the frontline fighting the pandemic, the Centre has looked the other way. We are just front-loading all our borrowing to take forward the fight. But the shocker is that when we went to the market the other day for our first tranche of ₹6,000 crore, the coupon rate was 9%. This, when the economy grows at 2.5%.
The Centre is pushing the States into a debt trap. When the Reserve Bank of India has slashed rates, why should the States be forced to pay higher interest rates? Ideally, the Centre should borrow from the RBI and make money available to States. The suspension of MPLADS funds also signals not just truncated decentralised expenditure. The money taken from this goes to a consolidated fund of India and not to a COVID-19 fund. There’s a major danger lurking in this, as this is part of a general policy to reduce expenditure. The trend globally is to the contrary. This will make financial upturn difficult.
There’s a major change required in the country’s macro economic policy.
‘Salary challenge is voluntary’
We have no intention of cutting or deferring salaries of employees. Why should we pay salaries of March otherwise? The salary challenge, urging employees to contribute a month’s pay to CMDRF, is voluntary. The response has been largely positive. But we have seen during the floods that there’s an inverse relation between the capacity to pay and the donation made. We will soon be issuing a comprehensive order with exemptions granted to certain sectors and may also add some incentives to people who are participating in this.
