Thomas Isaac faces a tightrope walk in pre-poll Kerala budget

THIRUVANANTHAPURAM: Finance minister TM Thomas Isaac – who introduced a revival plan for KIIFB and announced a Rs 25,000 crore development project under the fund as an outof-the-box idea in his first budget in 2016 – is set to wind up his innings with another major announcement that will address the unemployment issue faced by educated youth of the state.
Isaac, who has given clear hints during pre-budget consultations about the need for an innovative scheme for providing jobs, is learnt to have finalized one that will be the highlight of his 12th budget. Whether the proposal will see the formation of an Employment Mission, in line with Nava Kerala Mission, or some new special purpose vehicle is something that will be revealed at 9am in the assembly on Friday.
A recent study by the Centre for Monitoring Indian Economy found that unemployment rate in Kerala increased by 9.5 percentage points to 26.5% in May 2020. This is a sharp increase when compared with the 6.4% unemployment rate recorded May 2019.
The state, which has a concrete plan to support startup industries, lacks proper schemes to provide jobs to educated youngsters who don’t have ‘enterprise’ mindset. The issue of women unemployment, the rate of which is thrice as that of unemployment among men, will be specifically addressed in the budget.
With assembly elections four months away, the challenge before Isaac will be to present a populist budget by not burdening the public with additional tax. With fair price of land and stamp duties hiked last year, any new major tax proposal is unlikely.
Since the opposition, UDF, announced Nyay scheme for direct cash transfer to BPL families as the thrust of their manifesto, social welfare pensions are likely to be hiked further. There was hike of Rs 100 in all social welfare pensions as a New Year gift and another hike is on the cards from April. The success of free grocery kit supply for all ration card holders, introduced during Covid-19 crisis, has also induced thoughts about providing more items through ration shops at subsidised rates. A practical plan to replace free ration kits, which will be provided till April, is also likely in the budget.
With mounting debt and sharp decline in revenue owing to the pandemic, it remains to be seen how Isaac will find fund for these ambitious projects. A few major infrastructure projects will also find place in the budget, but those will be funded by KIIFB.
Though Isaac will present a full budget, there won’t be departmentwise discussions in the assembly which is a pre-requisite for passing the budget. Hence, vote on accounts for first four months of the fiscal for funding day-to-day activities of the government will be presented by Isaac along with the budget.
A general discussion of budget will be held in assembly from Jan 18 to 20. The newly-constituted assembly will have the responsibility of passing the new budget before June 30.