With fiscal clock ticking away, Kerala yet to dig half way into Annual Plan

Written by M Sarita Varma | Thiruvananthapuram | Updated: Jan 28 2008, 05:56am hrs
About two months to go for the fiscal year-end, the Kerala government is puffing and panting over the 74% unrealised portion of its 2007-2008 Annual Plan. Kochi, where a host of projects from Vallarpadom Container Terminal and Smartcity are slated to get going next fiscal, wears the dubious crown of the biggest laggard in Plan realisation logging only a 13% completion record.

Chief minister VS Achuthanandan, buoyed over an increase of 10.8% in the Rs 7,700-crore outlay for 2008-2009, was non-committal on the dilly-dallying over the current years Plan-implementation, when asked for comment. Efforts are on to achieve maximum realisation by March 31, was all that he said.

With time-overruns bleeding into cost-overruns, state departments are finding the effort to get cracking on the Plan process in the next 70 days too painful. The result is a crossfire of confusing directives. On the one hand, local bodies are told that if 80% targets are achieved, the remaining 20% can be carried over beyond the March 31 deadline. On the other hand, frightened by the high-speed cashflows that this would trigger, state government bosses have slapped 15% (of the total amount) and 20% cap on the February and March utilisation, respectively.

Civic bodies, which hog the biggest chunk of Keralas Plan pie, managed an incredibly low 7.44% realisation (as on December 31). Among corporations, Kochi was the worst performer with 13% and Kollam with 19% was the relatively better scorer.

The Left Democratic Front (LDF) government had blamed the administrative hassles of change of guard and the previous Congress-led United Democratic Front (UDF) government, when Keralas Annual Plan achievement in 2006-2007 finished at just 68.23%. But the prospects in the current fiscal seem to be heading from bad to worse with barely 25.76% of the 2007-2008 targets achieved (as on December 31, 2007). Those with a middle-class mindset fail to grasp the urgency of correcting the widening economic disparities in the state, says Prabhat Patnaik, JNU professer and vice-chairman, State Planning Board.

Predictably, the Congress-led UDF has found the slow Annual Plan a handy tool to hit out at the LDF government. Never were the state finances worse managed, says Opposition leader Ommen Chandy. Whats the sanctity of the planning process, at a time when Keralas battling an agricultural crisis as well he said.

Equally dissatisfied are economic analysts. The capital formation process is in bad shape, according to Bhavar Puri, chief general manager (Kerala), Nabard. The state should undertake bigger schemes, he says. The utilisation of funds under centrally-sponsored schemes was a mere 27.85%.

For once, state finance minister TM Thomas Isaac, too, is admitting to grave systemic inefficiencies.Its not easy to create credit absorption capacities in a jiffy, is the only explanation he has to offer.