Kerala Finance Minister Thomas Isaac has presented a Covid-dented State budget for 2021-22 that provides for additional expenditures of ₹ 1,164 crore and tax concessions of ₹ 191 crore against additional revenue mobilisation of just ₹ 200 crore, leaving a cumulative deficit of ₹ 1,306.69 crore.

Isaac presented his 12th overall and the last budget of the Pinarayi Vijayan government on Friday which observers dubbed as an election-oriented one. The 'jobs-welfare-doles' theme rang loud and clear in the budget after it earned a swashbuckling win for the ruling Left Democratic Front in elections to the local bodies held in December. Assembly elections are due in next four months.

Revenue expenditure shoots up

Budget estimates for 2021-22 provide for revenue receipts ₹1,28,375.88 crore and revenue expenditure ₹ 1,45,286 crore, leaving a revenue deficit ₹16,910 crore (revised estimates for 2020-21 ₹ 24,206.44 crore). Capital expenditure is projected at ₹ 12,546.17 crore (revised estimates at ₹ 9,350.82 crore).

Meanwhile, the budget envisages a raise in all welfare pensions by ₹ 100 to ₹ 1,600 in the State. Salary revision for government employees too has been announced, and will come into effect from April. Eight lakh job opportunities will be created in 2021-22 – three lakh for the educated, and five lakh for others.

Distribution of free food kits, which proved a runaway winner in the local body elections, will continue against the backdrop of the increased incidence of Covid cases, the Finance Minister said. Additional rice of 10 kg at ₹ 15 will be provided to 50 lakh families with ‘blue’ and ‘white’ ration cards, he added.

Procurement price for paddy up

Under the controversial Life Mission, 40,000 housing units will be given to Scheduled Caste families and 12,000 houses to Scheduled Tribe families during 2021-22. The procurement price of paddy is being raised to ₹ 28 and that for coconut, to ₹ 32 from ₹ 27. The support price of rubber is being hiked to ₹ 170.

The budget acknowledged the ‘great service’ rendered by ASHA workers on the Covid-19 frontline despite meagre allowances. The budget announced an increase of ₹ 1,000 in their allowances. At least 4,000 posts will be created, with the Health Department allowed to decide the fields and levels in which they are required.

The K- FON project that seems to provide free internet services to BPL families, will be completed by July. The Finance Minister said that ₹ 166 crore is earmarked for the share capital of K-FON. The next logical step is to ensure the availability of at least one laptop in every household, he added.

2,500 start-ups being initiated

The Finance Minister also announced the initiation of 2,500 start-ups during 2021-22 for providing employment to an estimated 20,000 people. The budget allotted assistance up to a maximum of ₹ 125 crore each to major universities in the state and ₹ 75 crore each to other universities.

An extensive programme is being formulated to impart training to an estimated 50 lakh educated youth. A skill mission will be formed for this purpose under Kerala Development and Innovation Strategic Council (K-DISC). An amount of ₹ 200 crore is being earmarked for K-DISC as knowledge economy fund.

20 lakh digital jobs promised

Jobs will be ensured to at least two lakh people who have taken break from professional employment in 2021-22. An extensive scheme is being initiated to provide employment to at least 20 lakh among them through digital platform within the next five years. The registration process will start in February.

A major project highlighted in industrial sector is the three industrial corridors with a capital investment of around ₹ 50,000 crore. These are the Kochi-Palakkad High-Tech Industrial Corridor, the Kochi-Mangaluru Industrial Corridor, and Capital City Regional Development Programme in Thiruvananthapuram.

Covid-19 impact on revenue

The impact of Covid-19 can clearly be seen in the revised budget estimates of 2020-21. There is a fall of 18.77 per cent in revenue income than the budget estimates. There was only a marginal dip of 9.64 per cent in revenue expenditure, ballooning the revenue deficit to 2.94 per cent. The additional expenditure was met by availing more loans, inflating the fiscal deficit to 4.25 percent.

But the income and expenditure for 2021-22 will show considerable increase, the Finance Minister hopes. A part of the loan sanctioned during 2020-21 has been earmarked for the next year. This is the reason why fiscal deficit is showing at 3.5 per cent during 2021-22, which could fall to three per cent in the coming years.

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