Kerala FM spins Rs 10k-cr plan to cover job losses

Written by M Sarita Varma | Thiruvananthapuram | Updated: Feb 24 2009, 05:49am hrs
Kerala finance minister TM Thomas Isaac has spun out a Rs 10,000-crore public works spending spree to cover job losses. His Rs 934-crore deficit state budget for 2009-2010, is also full of welfare sops for displaced Gulf migrants from the state, BPL, scheduled tribes, fishermen and senior citizens.

No new imposts, says Isaac, as he traces untrodden non-tax revenue paths in the hunt for ARM (additional revenue mobilisation). There is also the Rs 23-crore tax waiver in the budget, presented on Friday.

The LDF government has announced Rs 5000-crore public investments in roads, bridges, canals, airstrips and other infrastructure projects under public spending. Simultenously, the state will also pump money into the Rs 5000-crore social housing project, which will be spread over two years to address a demand-shrink, forced by profitability-collapse in export crops like coffee, rubber and cashew.

The state also targets to buoy private investments worth Rs 20,000-crore . Two major projects to the tune of Rs 10,000 crore are already close to getting cleared, says Isaac.

The return-trickle of Gulf expats, whose sendhomes equal 25% of Keralas income, has been another nightmare to state planners and job losses are the order of the day. The state budget has offered a Rs 100-crore package to help Gulf returnees set up industrial ventures. Those forced to return in less than two years in the Gulf would get help from the state in the form of a Rs 10-crore corpus. About two-thirds of the overall spending goes to capital expenditure as it creates assets for the future, says Isaac.

The vagaries in cash crops have also led state planners to mull on shifting the production base to food production. A Rs 64-crore food security scheme thrusts on spreading the area under paddy to 20,000 hectare. The ailing sectors of fisheries, coir, cashew and handloom have been allotted Rs 30 crore, Rs 64 crore, Rs 46 crore and Rs 50.9 crore each.

However, the fiscal deficit hovers around the hallowed 3% GSDP-mark. The states public debt is the highest in the country. At Rs 3007 crore, revenue deficit (during 2009-2010), which was to be zeroed down in the current year, is expected to be trimmed to 1.48% of the GSDP.

During extraordinary times as these, economy is more precious than fiscal rulebook. It is not spending in tune with the means, but making means to afford the kind of spending you need thats the challenge, he quips.

As promised, the tax mobilisation is at an alltime high, with commercial taxes alone whipping up 23% y-t-y surge. For the first time, VAT revenue crossed Rs 10,000 crore. With the switchover to e-filing of returns, this will see higher buoyancy, say officials.

Isaac was also able to pull out a couple of unconventional revenue rabbits from his Rs 574-crore ARM hat. For example, selling the silt sands from dams may fetch about Rs 300 crore. Lease or rent of state forest and revenue land has been increased. Rs 25 crore is eyed from penalty on those converting paddy fields for sheer commercial gains. Small sops are offered in IT, with a 50% rent breather in Technopark and Infopark.

North Kerala is the new focus of Keralas Gods-Own-Country pitch , now hit by fewer tourism arrivals. By the time the global meltdown gives way to upturn in two years, North Kerala will be ready with 27 Malabar destinations, vows Issac.