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Inclusive Budget Proposes 25 Projects to Build ‘New Kerala’

The CPI(M)-led Left Democratic front (LDF) government in Kerala presented its first post-flood budget on Thursday.
TM Thomas Isaac

Image Coutesy: India Today

New Delhi: Kerala Finance Minister TM Thomas Isaac on Thursday tabled the Kerala Budget 2019 in the Assembly on Thursday aiming to rebuild the flood-hit state. The budget focuses on the strategic improvement of health and education sectors along with steps to revive public sector undertakings (PSUs). A hike in the welfare pensions has also been proposed as well as significant fund allocation for gender budgeting. Of a total outlay for the Mission Nava Kerala (New Kerala) of Rs 1.42 lakh crore, the plan outlay has been raised from Rs 32,564 crore to Rs 39,807 crore.

Isaac, who began his speech by saying the state had faced twin tragedies -- floods and violent protests over the Supreme Court verdict upholding the entry women of all ages to Sabarimala -- proposed 25 projects to build a New Kerala. The projects will be implemented as joint programmes of the rebuild scheme, Annual Plan and Kerala infrastructure investment Fund Board. Rs 1,000 crore has been allocated for the Rebuild Kerala Initiative.

To generate additional revenue, 0.25% flood cess will be levied for two years on all goods coming under the Fifth Schedule, including gold, silver and platinum ornaments on the value of supply and Rs. 600 crore of additional revenue per year is expected through this measure, he said.

States facing natural disasters can henceforth levy disaster cess with recommendation of GST (goods and services tax) Council. The Council had permitted the state to levy 1.0% cess on supply of goods and services for rebuilding Kerala.

“Small dealers who have availed composition tax will be excluded from levy of cess,” the Minister added.

Rs. 2,500 Crore for Agriculture Sector

To tackle the post-flood condition, Rs. 2,500 crore will be spent on the agricultural sector. Of this, Rs. 770 crore is from the Plan outlay. An amount of Rs. 282 crore will be made available from Centrally Sponsored Schemes. At least Rs. 200 crore is expected from externally-aided projects. Rs. 1,000 crore will be set apart for agriculture from the schemes of Local Government Institutions.

In addition, Rs. 167 crore has been earmarked for crops and Rs. 71 crore for vegetable development. Since the attempt to encourage ragi and chama cultivation in Attappady was a success, the scheme will be extended.

The key focus of the 25 projects for a New Kerala are universal health security scheme, education excellence, environmental packages including a new Kuttanad package, Kerala bank, industrial parks and corporate investments among others.

Universal Health Security Scheme

With a major outlay of Rs. 1,406 crore, the government has also announced a comprehensive Health Security Scheme that has four components.

“First is, India’s best network of Primary Health Centres. Among them, 150 hospitals were upgraded to Family Health Centres. In the next stage, 200 more hospitals will be upgraded to this status. All the Primary Health Centres will be upgraded to Family Health Centres step by step,” said Dr Isaac announcing the government’s comprehensive health policy adding that “in this manner, Kerala will become a region in which the Astana Global Health Conference Declaration of primary health services will be implemented in full measures.” Modernisation of hospitals follows this. A comprehensive health insurance comprising interested private hospitals is the third stage.

The Ayushman Bharat Scheme has hit the states hard, Isaac noted. For a benefit of Rs. 5 Lakh, the premium must be Rs. 8000 premium, but the Centre is giving only Rs. 1,200. The fiscal burden will fall on the states, he added.

The new Karunya Comprehensive Health Insurance Scheme will ensure healthcare protection for all families in Kerala, he said.

The Kerala government also announced a higher honorarium for ASHA raising it by Rs 500.

 Boost to Kerala’s Public Education Sector

The past two years under the LDF government have seen a boom in general educational institutions. More than 2.5 lakh more students got enrolled in these institutions. Of these, 94% were students who had obtained their transfer certificate from private management schools.

For expanding amenities in the general education sector, an amount of Rs. 2,037.91 crore has been sanctioned from KIIFB and Rs. 170 crore is earmarked for the expansion of infrastructure facilities of schools that had not obtained financial aid from KIIFB.

Rs 32 crore is for upgradation of academic excellence, Rs. 10 Crore for remedial education programme named ‘SRADHA’. With the cooperation of Artists who are in receipt of Diamond Year Fellowship, Art Centres will be opened in selected schools in all districts.

“More importance is given to subsidiary education programmes in this budget,” Isaac stated.

Housing for All

Out of the 54,036 incomplete houses aimed for completion in the first 40 phase activities of Life Mission- which is trying to transform Kerala into a state with housing for all, 93% have been achieved.  A total of 1,84,255 beneficiaries, who own land but are homeless, are enlisted for housing assistance in the second phase of Life Mission. Housing construction of 79,159 beneficiaries in Grama Panchayats is in various stages of completion. All of these will be completed by the middle of March.

Apart from this, around 11,200 houses, under construction in urban areas, will be completed in this phase. Their construction will be started in the year 2019-20.

A total of Rs. 1,296 crore is earmarked for housing complexes for landless and homeless people, which is the third phase of Life Mission.

Public Sector Undertakings and KSRTC

“When this government assumed power, only 8 PSUs out of 40 were making profit. By the end of this financial year, the number of profit-making PSUs will rise to 20. The turnover will rise from Rs. 2,800 crore to Rs. 3,800 crore,” Isaac informed the Assembly.

Out of Rs. 527 crore provided for large and medium scale industries in 2019-20, Rs. 299 crore is set apart for public sector. A total of Rs. 1,000 crore will be made available as Government assistance for restructuring KSRTC in 2019-20. To create a model, KSRTC will switch over to electric buses.

New Kuttanad Package

The second phase of Kuttanadu package worth Rs 1,000 crore has been announced with focus on one time cleaning of backwaters and other water sources. Since the height of back waters has considerably increased due to accumulation of silt, the depth of back water will be increased by removing the silt and it will be strengthened by reconstructing outer bunds.

Rs. 47 crore has been earmarked for repair and construction of outer bunds. “Kuttanadu Drinking Water Scheme with KIIFB aid of Rs 250 Crore will become a reality in 2019-20.”

‘Thaneer Mukkom Bund’ is to be kept open at least for one year, for cleaning, by letting in salt water. An amount of Rs. 20 crore has been earmarked for compensating the agricultural loss.

Kerala Bank

A poll promise of the ruling LDF, the Kerala Bank, is on the brim of realisation. The idea is to merge the three-tier cooperative bank network in Kerala into a single large cooperative bank. Once it materialises, Kerala bank will be the largest banking network in the state with more than 800 branches and would also become the first ever scheduled bank in the cooperative sector of India. Deposit strength will increase from the current Rs. 57,761 crore to Rs. 64,741 crore, as non-resident citizens would also be able to invest, he said.

The legal framework for the operation of Kerala bank will be presented in the budget session of Kerala Assembly, but after certain amendments are made to the cooperative act to enable the functioning of Kerala Bank.

Placement for 10,000 Members from Scheduled Communities

Except Kerala, no other Indian State, at present, provides Development Fund to Scheduled Caste and Scheduled Tribes in proportion to their population. In Kerala, however, 9.81% of plan fund for Scheduled Caste Sub Plan and 2.83% of plan fund for Tribal Sub Plan are earmarked in the budget, which is higher than the proportionate share of their population in the state.

In India, such a principle itself has become irrelevant since the Central Government have dispensed with Five Year Plans,” said Isaac while announcing the government’s inclusive policy.

A novel scheme guaranteeing employment in the organised sector for Scheduled Communities is being implemented. A programme for providing employment in modern industrial and service sectors within and outside the nation through customised skill development to 10,000 members belonging to the Scheduled Castes and Scheduled Tribe communities, is also being implemented under the aegis of CREST and IIM Kozhikode. Such a scheme will be formulated for fishermen also.

Industrial Parks and Corporate Investments and Start Ups

Placing the industrial parks and corporate investment in the New Kerala project as a key, a total of 15,600 Crore has been allotted for industrial parks. “The size of the industrial parks will be increased to 6,700 acres.”

Stating that the experience of Chile and Estonia has to become a model for us, Isaac said “the start-ups began in 2010 as a precise accelerator programme has succeeded in attracting entrepreneurs all over the world to Chile.” An amount of Rs. 10 Crore is earmarked for formulating such a programme under the leadership of Innovation Zone.

Women and Transgender Empowerment

The Finance Minister observed that “... we are far behind like any other states in the case of gender status, though we have attained certain progress”. Considering all these facts, the Kerala Budget 2019 has allocated Rs 1,420 crore for women empowerment. The total outlay for schemes that meant entirely for women was only 4% of the total plan provision in 2016-17. However, this time, the plan outlay is enhanced to 6.1%.

When the special component for women in general development schemes is also taken into account, the total women share will be 16.85%. During 2017-18, it was only 11.5%.

Apart from these, sustainable employment opportunities for 25,000 women getting an income of rupees 400 - 600 will be created by the aforesaid livelihood intervention during 2019-20. A bank loan worth Rs. 3,500 crore with an interest rate of 4.0% will be made available to 65,000 neighbuorhood groups in 2019-20.

Rs. 285 crore was earmarked for Kudumbashree and Rs. 400 crore will be made available from Local Government Institutions. Apart from this, an amount of Rs. 315 Crore is available from various Centrally Sponsored Schemes. Thus, an amount of Rs. 1,000 crore is the budget of Kudumbashree. A rehabilitation scheme will be formulated for women groups, who are debt ridden due to loan taken for animal husbandry and small-scale industries. An additional amount of Rs. 20 crore is earmarked for this.

Though the confidence and visibility gained by the transgender community over the last few years is hopeful, we have to complete the task of making the transgender community the natural partners of general public, said the Minister.

Welfare Pensions

The anticipated expenditure during 2018-19 is Rs.7,533.72 crore. The central assistance received last financial year is only Rs.150 crore. In budget 2019, it was declared that all the welfare pensions are increased by Rs.100.

Rehabilitation and Restoration of Coasts

A package amounting to Rs. 2,000 crore had been earmarked in the Budget of last year for the comprehensive development of the fisherfolk community- Kerala’s own army, who rushed to the forefront of disaster to save the lives of their brethren who were trapped in the vortex of flood.  This will be expanded into a comprehensive programme in “Rebuild Kerala”. In 2019-20, over Rs. 1,000 crore will be spent on the development works in the coastal areas.

Concluding the that total expenditure of the Government has increased to 13.88 percent in relation to 2018-19 Revised Estimate, the minister said: “the vision of this Government behind this decision is that the government expenditure needs to be increased to prevent the economy from falling into recession in the context of income from gulf countries getting decreased.”

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