Populism is the refuge of any government and it becomes so evident during budgets. The Left government headed by Pinarayi Vijayan has from the very beginning been attempting to project himself and his government as investor-friendly and pro-development. This was palpable with his initial pronouncements soon after taking charge as the CM. This attempt to take a course correction or rather a change in direction can be seen in the budgetary pronouncements as well. Finance Minister Thomas Isaac, praised even by his detractors for his eminence as an economist, appears to have mixed populism with economic prudence in his maiden budget presented today in Kerala assembly.
Isaac seems to have smartly blended populism with practicality. For instance, the “fat tax” on junk food items such as pizzas, burgers, tacos, etc. is a double-edged sword. While it is seen as a measure to fight the growing problem of obesity in the state, the measure obviously helps the government fill the cash-strapped exchequer.
Isaac’s promise of increasing tax revenue by 25 percent per annum by various measures like doing away with corruption is a welcome step provided the promise is followed by prudent measurers and committed plan of action. Ditto the announcement that steps would be taken to attract Rs 1 lakh crore investment in various sectors in the next five years. Industry insiders like me are eager to see how this is going to become a reality and hope that this will not just die down as just another budgetary rhetoric. I hope the Pinarayi government lives up to his initial assurances given to the state when he took over the reins of the state.
The decision to impose tax on packed wheat products and coconut oil may be regarded as unpopular but essential in the face of resource crunch. The allocation of Rs 5,000 crore for infrastructure projects and Rs 385 crore for 17 by-passes in the state and roads will hopefully address the infrastructure-related challenges of the state.
Other investor-friendly announcements, such as Rs 1,300 crore for the IT sector, backing of 1,500 start-ups, etc., if implemented in right earnest, can take the state into the country’s IT map in all its glory. The million-dollar question is if the Pinarayi government will strive doggedly to implement these developmental agendas with the attention they eminently deserve. This is where the wherewithal of the government will come for public scrutiny and the industry watchers watch with eagerness.