The Left Democratic Front (LDF) government in Kerala is in the mood to drop its farm-fixation for the Annual Plan for next fiscal. Dismayed by poor utilisation of the current year?s outlay in the primary sector, the State Planning Board has turned its attention to public-private partnership(PPP)-driven industrial infrastructure building, including road works, in the second year of the Eleventh Plan.

At Rs 7,605 crore, there is barely a 9% increase in Plan size. In 2006-2007, the Plan outlay was Rs 6,950 crore. ?This will be finalised only after discussions with the Plan panel on December 19,? chief minister VS Achuthanandan said.

At least Rs 100 crore additional Plan funds are likely to be alloted to industrial infrastructure. Roads, where the LDF government was on the warpath over collecting toll, are slated to get at least Rs 50 crore extra Plan funds in the next fiscal. ?Probably, it?s just to square up for the low priority that industry received in the current Plan year,? says state industry minister Elamaram Karim.

Interestingly, it is the LDF?s liaison panel that pushed for PPPs in infrastructure-building, while State Planning Board vice-chairman, Prabhat Patnaik, was not in favour of keeping the sectoral distribution skewed towards agriculture.

But only 30% of last year?s Plan outlay has been utilised so far. Since only 20% can be carried over to the next year, it is doubtful if LDF?s prestigious Agricultural Debt Relief Commission will be able to deliver its brief.

This change of direction in priorities is both supply- and demand-pushed. Poor cash flows into projects meant for developing the state?s artery roads had been a matter of public debate this year. The steering panel of LDF had to come out with a policy decision on public work PPPs.

In addition, the state government has readied an industrial infrastucture-building PPP outfit Inkel (Infrastructure Kerala). Another PPP infrastructure-builder in IT has just been announced.

?At Rs 100-crore (state-to-private equity in 26:74 ratio), InKel is not short of equity offers or project support offers from overseas funders,? says InKel managing director GC Gopala Pillai. This entity proposes to undertake road or flyover works on revenue-generating terms.

Meanwhile, the State Planning Board, which met last week, pointed out that the allotment to industry was primarily to give a helping hand to the state public sector. While new PSUs have been vetoed, the extra funds are expected to give a fresh lease to modernise small and medium enterprises. For tourism and IT, as in the previous year, the Kerala government expects to stay in the background as a facilitator.