‘Change policies to promote industry and manufacturing’
In an interview with Jayanth Jacob, Kerala Finance Minister K N BALAGOPAL debunks the notion that the state has labour problems, stresses why welfare measures are important, and reiterates the “harm” goods and services tax has caused to the states. Edited excerpts: The Kerala model of development has won acclaim for making laudable strides in public health and education. But it remains a consumer state, hugely dependent on remittances. You have been talking about the state becoming a producing state in the near future. What is the basis of your confidence?
The services sector plays a key role in the state’s economy. As it is, Kerala’s unemployment rate is high. Nearly a million people have come back from abroad in the wake of Covid. Tourism, our key revenue-earning sector, is in trouble. Our first priority is addressing the pandemic. We were the first state in the country to declare free vaccines for all before the Centre did it.
We need to address the health emergency in the best possible way so that industries can be back on track, and the tourism sector is back in action. We are helping people both in cash and kind.
In this background, we are looking at rejuvenating industry and agriculture through concerted efforts. For example, we have announced a Cooperative Initiative for Agriculture Infrastructure in Kerala (CAIK), which is aimed at shoring up capital investment. We have a loan scheme for primary cooperatives at 4 per cent interest, aimed at increasing production.
We have a lot of cash crops, and are a unique landmass that can produce the rarest of fruit and vegetables. We have to reimagine how we see our plantations. We have chalked out plans to make funds available for cold chains and processing centres for making value-added products from fruit, vegetables, and spices, which are aplenty in Kerala.
I see many people are willing to experiment with their ideas in this field. We need to handhold them and ensure they can make industrial raw materials from agricultural products, and get scale and market access. In the health sector also, we are encouraging small and medium industries to come up with products and ideas. We want to facilitate them via cheap loans and other help.
When it comes to capital and making money, the general attitude of the people in the state — also known for militant trade unionism — is neither entrepreneurial nor encouraging. Yours is a cadre-based party, and you are a grassroots political leader who rose through the ranks. Are you confident of an attitudinal change among the people of the state?
The first part of your question stems from a wrong perception. Please rectify it. Where are these labour issues now? Kerala has quality labour and we insist that the labour laws of the country are respected and minimum wages stipulated by law are given to workers. This in no way amounts to being anti-industry. There are many companies in Kerala in various sectors, including IT, that are making good profits.
The problem is that the industrial atmosphere in the country has to change. The government of India needs to change its policies to promote industry and the manufacturing sector. We need to promote indigenous industry and indigenous knowledge and translate them into industrial production.
Welfare is at the heart of the policies of your government, and that helped you win a second consecutive term. but the state’ s public debt is around 35 percent of gross domestic product( gdp ). even if you discount the exigencies brought about by covid, is it something that is sustainable?
Running welfare schemes is important for the government. We have a universal and free system of distributing food grains and groceries to all people. Five million deserving people are getting one welfare pension or another at an average of ~1,650 per month. Along with inexpensive public health care and a heavily subsidised public distribution system, this pension is a real help to those people. In the wake of Covid, we have extended the reach of these pension schemes to people in the unorganised sector.
Welfare measures are the duty of a government in a country where the income of the people is coming down and employment rates are going up.
You have consistently raised concern over goods and services tax (GST) and made a dissent note to the select committee when you were a Rajya Sabha member in 2015. Your predecessor thought as a consumer state Kerala would benefit from GST. Where do you stand now as finance minister of the state?
The Left parties had opposed GST in the select committee. Our primary contention was that GST would destroy our federal structure and the economic independence of the states. Barring a very few items, the states do not have any taxation rights. We contended the states would end up with the begging bowl before the Centre and the state finance ministers would end up being mere distributors of whatever they would get from it.