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THIRUVANANTHAPURAM, March 14

DESPITE a steep fall in the prices of cash crops such as pepper, tea, coconut, ginger and rubber in the last year, the Kerala economy and State Government's finances are back from the brink and in turnaround mode, says the Economic Review 2002.

However, the review compiled by the State Planning Board declares that the turnaround will have to be completed in the current year if the State is to achieve the targets of the Tenth Plan and avoid a repeat of the financial crunch of the late 1990s.

Quick estimates put the growth rate of the State's economy in 2001-02 at 4.7 per cent, which is lower than the provisional figure of 5.3 per cent for 2000-01, the review says.

On the fiscal front, estimated own tax revenue for 2001-02 is likely to be short by Rs 416 crore over 2000-01, while non-tax revenue for 2001-02 is estimated to be up by Rs 146 crore. The document points out that non-plan expenditure is estimated to be short by Rs 405 crore. However, sales tax collections in 2001-02 are estimated to have risen by around R 100 core, the review says.

"The deficit after committed expenditure estimated for 2001-02 was Rs 384 crore as against Rs 2045 crore estimated for 2000-01. This shows the State has taken steps in reducing the ever-increasing deficit by limiting non-plan expenditure," the review declares.

It goes on to add that if the State is able to augment its own revenue collection over the next few years while reducing non-plan expenditure, it will be looking at a revenue surplus in 4-5 years.

Revenue receipts increased by 3.7 per cent in 2001-02 over 2000-01, the review says. Capital expenditure in the State was Rs 558.36 crore in 2001-02, the report adds.

According to the review, the State's agriculture sector is in the midst of an unprecedented crisis, with a drop in the prices of major cash crops.

Additionally, the State is amongst the worst-affected by the agriculture-related trade policies adopted by the Government of India, the report explains. As part of its efforts to cope with the crisis in the agricultural sector, the State Government set up a Commission under Dr M.S. Swaminathan. The Commission has submitted a series of recommendations to the Government, the review says.

Agricultural income is estimated to be Rs 7264 crore in 2001-02, registering an increase of 1.74 per cent over the previous year. "Diversification of agriculture needs to encompass subsidiary activities such as apiculture, dairying and poultry, and marketing strategies need to be designed to make these products internationally competitive," the review declares.

Financial institutions such as IDBI, IFCI, NABARD, NCDC and so on disbursed an amount of Rs 817.2 crore in 2001-02, an increase of Rs 116 crore over 2000-01. The credit-deposit ratio in the State continues to be on the low side at 43.41 per cent by the end of September 2002.

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