Dr. N. Ajith Kumar (Dirctor, CSES)
This analysis of the 2020-21 Kerala Budget was published in the Times of India on 08.02.2020
The Budget for 2020-21 was presented in the context of a fiscal crisis caused partly due to the increase in expenditure commitments to rebuild Kerala after the severe floods which affected all sectors of the economy and the decline in central assistance to the state. The overall recession in the Indian economy also places constraints on Kerala. The positive signal is that though the state has not fully recovered from the adverse impact of the triple whammy of demonetisation, GST and the floods, signs of revival are evident as state domestic product grew by 7.5% in 2018-19 compared with 7.3% in the previous year. It also indicates that the situation in the state is better than at the national level. However, the uncertainties in the economy, in particular, here and elsewhere have resulted in a reduction in spending by Malayalis. The number of returns emigrants is increasing and there has also been absolute decline in the number of Malayakis working abroad.
In the social sector, there has been a 10% increase in allocation to the health sector. Such an increase is welcome, to sustain the achievements of the state and to meet the challenges of managing communicable diseases in the state. The special assistance for local self-government institutions, which prepare the database on the health condition of people, evaluate patients through screening, provide treatment and ensure disease prevention activities and arrange palliative care is another initiative proposed in the budget worth mentioning. Kerala has the highest proportion of elderly among state in India. The proposal in the 2019-20 budget for starting day homes (pakal veedu) for elderly by all local bodies was a scheme which did not materialize. This budget has made it mandatory to include such projects in the plans of local governments.
Another highlights of the budget in the social sector is the increase in the pension for all categories by Rs.100. More importantly, the state has been able to increase the number of beneficiaries. The approach to eliminate ineligible persons from the beneficiary list will have a significant impact on the effectiveness of fund utilization.
The significant improvement in the allocation for women is worth mentioning. The outlay for schemes for women will double in 2020-21 compared to the previous year. A gender budget analysis has been done as part of the budgeting exercise and elderly budgeting is proposed in the Budget. It is worthwhile to consider such an analysis on funds for persons with disabilities. Given the commitments under the Rights of Persons with Disabilities Act 2016, higher allocation was expected for schemes to protect the rights and welfare of persons with disabilities. The fund allocation for making public spaces barrier-free is also inadequate given the magnitude of the task and the urgency of the work.
Another positive feature of the Budget is the provision for rejuvenation of rivers and rivulets on a wider scale. Apart from the funds earmarked for it, the use of MGNREGA labour for such activities will help to improve the outcome of the programme and productivity of such labour. Overall, there has been a serious effort by the government to sustain the financial inputs in the social sector despite the constraints mentioned earlier.