The Kerala government, led by CM Oommen Chandy, has been facing criticism all around—be it the slow pace of infrastructure development, sluggish job creation or internal bickerings within the United Democratic Front (UDF). In an interview with Darlington Jose Hector and M Sarita Varma, Chandy talks about his plans to bring Kerala to the forefront of development despite mounting financial constraints.
There is a long-running debate comparing Gujarat and Kerala. Economist Jagdish Bhagwati is an admirer of what Modi did for Gujarat as chief minister. Amartya Sen highlights the high social sector spending by the state government fuelling Kerala’s growth. What is your take?
While the Gujarat model may have its own advantages, I have my doubts if it has made any significant difference to the state’s rural infrastructure. Welfare and development seem too urban a phenomenon in Gujarat. But achievements in Kerala are uniformly spread across rural and urban belts, be it health or educational indices. Social infrastructure has an equity component in Kerala, thanks to years of focused policy interventions. This reflects on the income levels too—Kerala figures high on monthly household expenditure charts of NSSO survey results equally in rural and urban categories. Our Vision 2030 document targets to maintain 7.5% growth in the next 20 years. It aims at pepping up per capita income in the state from the current $4,763 to $19,000 in 2039, and to $36,000 by 2040.
Kerala plans to reduce unemployment rate from 9.9% to 2%. How will job-creation happen?
Our youth should turn into a generation of job-givers instead of a generation of visa-oriented job-hunters. We had initiated a student entrepreneurship policy. Students who start a venture get 20% grace attendance and 4% grace marks. Over 400 student entrepreneurs are active in colleges. Over 1,000 business ideas from colleges are waiting to be hatched. Next we set up Kerala Startup Village. We earmarked R500 crore as assistance to entrepreneurs in the Village. We provided 10,000 sq ft of workspace to the Village to provide incubation support to 40 start-ups. This IT infrastructure will be gradually enhanced.
You also floated the Navaratna project, where ministers were told to oversee major projects including Kochi Metro, Smart City, Kannur airport, Vizhinjam port, etc. Are these on track?
We also landed international class sports stadium infrastructure as part of National Games 2015. Sports and adventure tourism segments can significantly add to our R20,000-crore tourism revenue. Land hassles for Kochi Metro are almost over. We had planned that it would take 1,085 days for completion. As on now, I am fairly sure that Kochi Metro will commence operations on the 18-km stretch from Aluva by June 2016. Kochi Smart City, in partnership with Dubai Tecom, is envisaged to generate 90,000 jobs when complete. With regard to the R1,900-crore Kannur airport, we are committed that the first trial flights will take place in December. Light metro rail in Thiruvananthapuram and Kozhikode will be completed through a R6,728-crore investment under PPP. Vizhinjam port may be slightly delayed because of some petty litigations in the past. The growth dividend will come from development of coastal and inland waterways. About 530-km of coastline and 44 rivers are slated to make Kerala the best water transportation system. Cargo movement costs could go as low as R1 per tonne per km. Development of small and medium ports in Kollam and Kottayam has also improved the prospects of cargo movement costs.
Infrastructure projects have a cost. For national highways alone, the state will have to cough up about R35,000 crore…
We may come up with SPVs to handle funding. We may broaden the terms of reference of the Kerala Road Fund Board, Kerala Infrastructure Fund Board, etc. We are considering floating an outfit to tap investments of our 2.4 million expatriates. Remittances from them crossed R72,000 crore in 2013-14.
State finances appear stretched. Debt is 29% of GDP. The government is unable to tinker with its liquor policy because the liquor revenue of over R8,000 crore fuels the exchequer. How will you tackle public finances?
There is no roadblock to infrastructure funding. However, managing government finances is more challenging. We cannot tax the people more. We can only plug tax evasion. The only other revenue-side option is to whip up non-tax revenue. In the agricultural sector, development of new products like neera (sweet coconut toddy) would give a boost to rural incomes and trickle revenue streams into the coffers. There were worrisome days when downturn on the farm front spelled financial woes for the exchequer. The foray into neera production has paid off well. Farmers could fetch up to R3,000 per coconut palm a month from neera tapping.
It would have been tempting to cling on to excise revenue, which was substantial. But we decided not to. For every extra rupee coming from excise, there are costs to be paid by way of road accidents, hospitals and litigation. We have decided not to go for new liquor outlets. Adding one outlet would have brought in R24 crore extra revenue. But we have allowed beer and wine parlours, as state tourism policy needs these facilities.
Affordable universal health has been the highlight of your dream welfare state. What is the current status of this crusade?
As every family has some member spending money on costly medical treatment, I feel health should be every citizen’s right. Both the Centre and states should pass the Right to Health Bill. Since this would involve a great deal of money, the Centre needs to give us a helping hand. I made this point at the meeting of chief ministers, convened by the Prime Minister. In the absence of a suitable substitute for Planning Commission, it is difficult to make much headway for any high-cost welfare proposal. But I have not given up hope. However, it is not as if Kerala is making this case without doing its bit. The state has already done free cochlear implants for 500 children below five years. This surgery costs R5-8 lakh in a private hospital. A large number of petitions I received during the mass-contact programme were for supporting medical treatment. I am committed to making Kerala the state with the best health infrastructure in the country. Yield from sales of state-run Karunya Lottery creates a corpus for footing the medical treatment of identified patients to the tune of R2-3 lakh per case. Plus, 16 medical colleges will be set up this year. The Vision 2030 aims to reduce maternal mortality rate to 12 from 81 and tame infant mortality rate from 13 to 6. The number of doctors per 1,000 people will raised to 65 from the current 9.9 and the number of nurses to 70 from the current 34.6. Health insurance for all and government-regulated private health cover are in the pipeline.
Your government seems to be riding whirlwinds of controversies. Even finance minister KM Mani’s Budget presentation plans are in a jeopardy because of bribery allegations…
It’s all in the game. I do not believe that a senior leader like KM Mani could be involved in this. Please notice that those making allegations have not been able to produce any worthwhile evidence. When I was the state forest minister in 1982 there were petty corruption charges against me and a sitting judge headed a commission to probe on the charges. They spent about R20 lakh, a pretty pile of money at the time, on the commission and went on to discover I was neither the defendant nor the accused and not even the witness.
There is a positive investment climate in Kerala. Earlier there used to be unending series of unhealthy debates on developmental issues like road width, electricity line, etc. We have come out with good compensation packages for those displaced by big projects.
But the results are still evading the state…
By and large I would say Kerala is on the cusp of change. Not just infrastructure projects but mindsets too. This could pay off soon.