State pins hopes on steps to overcome pandemic-induced slump in Union Budget

Kerala’s wish list includes State-specific packages and support for flagship programmes

January 31, 2022 07:42 pm | Updated 07:42 pm IST - THIRUVANANTHAPURAM

Kerala will be keeping its fingers crossed as Finance Minister Nirmala Sitharaman presents the Union Budget on Tuesday. While nursing the grievance that many of its past demands remain unattended, the State is pinning its hopes on measures for overcoming the pandemic-induced slump in multiple sectors.

Kerala’s wish list includes State-specific packages, with focus on sectors such as agriculture, agro-processing, and micro, small and medium enterprises. Among other things, the Communist Party of India (Marxist)-led Left Democratic Front government is also looking at support for flagship programmes, including the SilverLine semi-high-speed rail corridor project.

Finance Minister K.N. Balagopal had raised these and a number of other demands during the pre-budget consultations in New Delhi in December.

The State has sought a rational approach to cess and surcharge, seeking either their removal or a reduction, especially on petrol and diesel. Kerala also wants the Centre to compensate for the fall in revenue from the divisive pool and extend the Goods and Services Tax compensation period by another five years.

The State government notes that its share of Central taxes has dipped from 3.92% in the 1980s to 1.925%. According to the State, in 2020-21 alone, it had suffered a revenue loss of ₹6,400 crore.

In December, citing the emergence of the Omicron variant of COVID-19, the State had asked the Centre to make the National Health Mission (NHM) a 100% centrally sponsored scheme. At present, the Centre-State funding for NHM is on a 60:40 pattern.

The State is seeking support for the Ayyankali Urban Employment Guarantee Scheme and exemptions from the Fiscal Responsibility Act for market borrowings for infrastructure projects, especially the flagship programmes. Kerala is also on the look-out for special assistance for NRI returnees.

The pandemic has pushed small industries in the State into a crisis, and many are struggling to stay afloat, points out K.A. Joseph, general secretary, Kerala State Small Industries Association. “The rate of interest on loans should be brought down to 4%, as in agricultural loans, if the sector is to overcome the slump. The cost of raw material has also increased. Numerous units have been pushed to closure during the pandemic,’‘ says Mr. Joseph.

Many of the past demands of the State also remain unaddressed. This include the establishment of a medical institute equivalent to the All India Institute of Medical Sciences in the State and including the Malabar Cancer Centre in the Rashtriya Arogya Nidhi programme.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.