Viewpoint: Big-ticket plans but where is the money going to come from?

For a State facing existential angst on the financial front, policy watchers and the public were looking to well-grounded cues on how the Left Democratic Front government would sustain the much-touted “Kerala model” of debt-funded welfare-cum-development in the face of borrowing constraints under the FRBM rules. In short, a plan B.

Willing to strike but afraid to wound — that about summed up the stance of Finance Minister K.N. Balagopal, as he unveiled the State Budget for 2024-25 on Monday.

For a State facing existential angst on the financial front, policy watchers and the public were looking to well-grounded cues on how the Left Democratic Front government would sustain the much-touted “Kerala model” of debt-funded welfare-cum-development in the face of borrowing constraints under the FRBM rules. In short, a plan B.

The Finance Minister made some pragmatic moves, untrammelled by the trappings of ideology, to attract the private sector into areas like tourism, setting up of universities, industrial parks, “Chinese-model” special development zones and a massive flagship international residential-commercial complex at Marine Drive, Kochi.

From the perspective of a growth-push, the promise that the government plans to take up construction of houses costing ₹10,000 crore under its LIFE (Livelihood, Inclusion and Financial Empowerment) Mission for the poor in the next two years is also a welcome move.

“Programmes are being planned to attract investments to the tune of ₹3 lakh crores within the next 3 years,” he said. There was a directional thrust in the Finance Minister’s presentation — for instance , weaving a structure of three hubs.

The first is a plan to create a “growth hub” around Vizhinjam port, set to become operational by May, 2024. The government aims to make Vizhinjam a centre encompassing townships, residential and commercial areas, warehouses and entertainment zones, requiring huge investments.

Secondly, the Government proposes to provide “special incentives and packages” for transforming Kerala into a “higher education hub”. The State will attract private investments for establishing new higher education institutions in Kerala having international standards in partnership with the private sector. This marks a refreshing U-turn from the policy of opposition to the private sector’s presence in higher education, including self-financing colleges.