This report was published in The New Indian Express on 06.02.2024
Inspired by China’s idea of development zones of the late 1970s, Balagopal said Kerala will adopt a similar idea by creating such Special Development Zones (SDZ) to utilise the entire developmental potential of Vizhinjam.
Amid a deep financial crisis, Finance Minister KN Balagopal on Monday presented the budget for 2024-25 that focused on Kerala’s transition to the “sunrise” economy, relying on futuristic strides in technology, but lacked big ideas to come out of the fiscal mess and instead blamed the Union government for the state’s problems. In a speech that lasted two-and-a-half hours, Balagopal gave thrust to private investments, including in higher education, and promised to explore opportunities to set up campuses of foreign universities, a move seen as a major policy shift for the CPM-led ruling front.
Coming ahead of the Lok Sabha elections, the speech contained a litany of complaints against the BJP-led Central government and said the state would have a Plan B to counter the situation. He, however, did not say what the plan is. “We are not ready to make any cuts in the benefits provided to people. We will definitely have to figure out a Plan B,” Balagopal said. “There are suggestions and thoughts regarding Plan B as well. In any case, we will find a way to move forward retaining the virtues of the Kerala model of development,” he said. “Thakarilla Keralam, Thalarilla Keralam, Thakarkkanavilla Keralathe” (Kerala will not be shattered, Kerala will not tire, Kerala cannot be destroyed), he said, amid thumping of desks by the ruling front members.
The budget also announced ambitious plans to attract Rs 3 lakh crore investments in three years through key sectors such as tourism, development in and around the new Vizhijam port, and industrial corridors of Kochi, Palakkad, and Kannur.
Inspired by China’s idea of development zones of the late 1970s, Balagopal said Kerala will adopt a similar idea by creating such Special Development Zones (SDZ) to utilise the entire developmental potential of Vizhinjam. He said an international investors’ meet will be conducted in 2024-25 itself with the objective of attracting investors who will harness the potential of the Vizhinjam port.
On his focus on the sunrise economy, Balagopal said statistics show that as entrepreneurs are flocking to the sector and investment is growing, production and employment opportunities are increasing. Amid concerns of fiscal indiscipline, Balagopal promised to walk the path of fiscal consolidation and bring down the fiscal deficit to 3.4% of the GSDP in 2024-25 from 3.45% in 2023-24. While he chose not to impose any major burden on the common man, he announced a small hike in electricity duty to raise around Rs 125 crore and a marginal increase in the judicial court fee to raise Rs 50 crore.
Experts felt the budget was a lost opportunity. “This crisis should have been used as an opportunity to announce some big policy steps,” said D Dhanuraj, founder-chairman of the Centre for Public Policy Research, a Kochi-based public policy think-tank. “It was just a usual conventional budget. There are no steps to energise the economy,” he said.
Jose Sebastian, former faculty of Gulati Institute of Finance and Taxation, said: “Other than the opening up of the higher education sector to foreign universities, which is a clear policy change as far as the CPM is concerned, there is not much to talk about.” Krishnakumar K K, senior fellow at the Kochi-based Centre for Socio-economic and Environmental Studies, however, said the finance minister judiciously tried to use the limited resources available due to the decrease in the central share and slashing of the borrowing limit.