Kerala Budget: Minister Balagopal blames Union govt for financial crisis, mentions Plan B

With the preamble of Constitution on the logo of the budget cover, Balagopal began a long tirade against the Union government in his speech, for "pushing the state towards the worst financial crisis in its history."
Minister KN Balagopal
Minister KN BalagopalFacebook
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Applause rose in the Assembly House of Kerala when minutes into his budget speech, Finance Minister KN Balagopal recited, "Thakarilla Keralam, thalarilla Keralam, thakarkkanavilla Keralathe" -- Kerala will not be shattered, Kerala will not tire, Kerala cannot be destroyed. With the preamble of Constitution on the logo of the budget cover, Balagopal was just beginning a long tirade against the Union government in his speech, presented on Monday, February 5, for "pushing the state towards the worst financial crisis in its history."

Neglect by the Union government towards the state reached its peak during the current fiscal year, he said, and added that the hope is that the legal battle waged at the Supreme Court and the political protests outside will improve matters. However, he said that if things don't get better, there should be a Plan B. “The development and welfare activities should continue at any cost; and they will. 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,” the Minister said.

Without waiting for justice from the Union government, the state shall use its resources to raise capital investments from private and public sectors, along with strengthening existing models, he said. Short term projects will be formulated to generate jobs and income in addition to medium and long term projects. The state shall, for instance, implement a new scheme called Maargadeepam, for providing scholarships to minority students of classes 1 to 8, a scheme that was withdrawn by the Union government, he said. 

Minister Balagopal says Kerala will not be shattered:

Balagopal blamed the excessive centralisation of resources and discrimination by the Union government for the financial crisis in the state. The government aired these grievances before the public during its Nava Kerala Sadas, its outreach programme held last year. Stressing once again on the neglect of the Union government, Balagopal said that economists and even the Opposition agreed that it is unjustified and should be raised in the Parliament. 

Cutting tax share, borrowing limit, shares in schemes

Reminding the Assembly about the tax share due for the state, Balagopal said that the Union government provided only Rs 21 against Kerala's own tax collection of every Rs 79, when they were supposed to give Rs 35 for every Rs 65. "That is, only Rs 21 out of Rs 100 is the Union government's contribution. Uttar Pradesh gets Rs 46 out of Rs 100 from the Union government. Bihar gets Rs 70 out of Rs 100," he said. He also gave details of the percentage of tax share of the state that had come down from 3.87% in the 10th Finance Commission to 1.925% in the 15th Finance Commission. 

Preamble of Constitution on Budget cover
Preamble of Constitution on Budget cover

Kerala's borrowing limit too had been cut down, and even the amount slated by the Union government guidelines (Rs 39626 crore) has not been allowed for the state. Kerala could borrow only Rs 28830 so far, he said. 

In addition, the Union government has not allocated proportionate funds for the Saving Cum Relief scheme meant as relief for fishermen in lean months, or for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Balagopal also brought up the Union government's withdrawal in housing projects when the State refused to brand the houses with labels of PMAY (Pradhan Mantri Awas Yojna) to mark its share. 

In his conclusion, Balagopal said that Kerala was the first to raise how the Union government took different approaches to different state governments and that it is proud to have raised the slogan for "the protection of cooperative federalism and protection of rights." 

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