Why Kerala gets a raw deal from the Centre | India Today Insight
Political discrimination, small state handicaps or systemic failure, whatever the cause data shows that Central allocation and budgetary provisions for Kerala have been going down over the years
The land of spices and protests is gearing up for another lengthy agitation. And this time because the state feels Delhi is not giving it its due. The CPI(M)-led Left Democratic Front (LDF) government in Kerala feels a vindictive Narendra Modi government is withholding funds and "throttling" the development of the state.
The LDF is organising a state-level protest on August 6, but the truth is Union governments in the past too have been fickle overlords. Even when the Congress-led United Democratic Front was ruling the state during the days of UPA-2, Kerala still never got its due. Congress chief minister Oommen Chandy could not protest openly, but there were enough grumbling noises and protest memos.
Now new data from the Comptroller and Auditor General's office shows that grants for Central plan schemes to the state went down to a low of Rs 71 crore in 2016-17. The years 2014-15 and 2015-16 were slightly better, with Rs 158 cr and Rs 170 crore respectively. That said, non-plan grants used to compensate earlier. From 2011 to 2014, Kerala received grants of over Rs 1,000 crore under centrally sponsored schemes. Since the NDA government took over, even these grants have come down by 35 per cent.
Divya S. Iyer, director at the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) in the state, attributes the low funding listed in the CAG report to the direct benefit transfer (DBT) scheme where money goes to programme beneficiaries directly. "Earlier, only a limited few with job cards received wages through electronic transfers to their accounts. Since 2018, almost all wages are credited to their accounts," Divya explained. In fact, MNREGA saved Kerala after the floods as the state effectively used it to get grants (Kerala and Tamil Nadu have the maximum utilisation; women's participation is above 90 per cent in the state).
According to S.M Vijayanand , former chief secretary and an expert on rural development, the state gets a better deal from central governments in social sectors - ICDS projects, Sarva Shiksha Abhiyan, National Rural Health Mission and MNREGA. "Where we are being sidelined is infrastructure development. When it comes to development of railways, national highways, inland waterways, Central PSUs and research organisations, Kerala's demands/ requirements are often ignored," explains Vijayanand.
He says Kerala has failed to design a follow-up mechanism in getting plan and non-plan funds or submitting novel projects in priority areas where mega funding or grants are allocated by the Union government.
Dr K.M. Abraham, CEO of the Kerala Infrastructure Investment Fund Board (KIIFB) and former chief secretary, puts it all down to politics. "Kerala is politically and economically weak. We have only 20 MPs and economically we are no power house. Our neighbours like Tamil Nadu and Karnataka are economically strong and can collectively bargain for the development of the state. They also have a strong industrial lobby which can put pressure on the Union Government and demand a higher share," he says.
Abraham has managed the state's finance during both UDF and LDF stints and feels that the Centre's scrapping of the Planning Commission has made Kerala's position even more disadvantageous. "Central plan assistance is at a minimum now and grants for central schemes have also been cut down. Now the Centre allocates funds on priority schemes, which is less relevant to a state like Kerala. So the cut in Kerala's central budgetary allocation may continue forever. The state will have to develop alternative financial resources to fund its development projects," says Abraham.
It's also not easy for Kerala to raise its own resources without the Centre's support. Chief Minister Pinarayi Vijayan knows that he has limited options and has tried to smooth things over with the Modi government. He's been careful not to speak against the prime minister nor vent his animosity for the BJP. Even then, the Centre has put up hurdles, a case in point being obstructing the UAE aid for the state after the deluge in August 2018 and sabotaging the state cabinet's travel plans to meet the global Malayali diaspora in 11 nations.
Vijayan too contributed to the situation after the floods. He made a blunder by announcing UAE aid for the state based on information given to him by the powerful NRI billionaire, M.A. Yusuf Ali. "The CM didn't take into account the political undertones while making the announcement. After the prime minister had visited the flood-affected areas accompanied by Vijayan, the Centre had announced Rs 500 crore as a first instalment for relief and rehabilitation works. The next day, the chief minister announced the UAE aid of Rs 700 crore. The PMO probably felt slighted--they intervened in the matter and invoked existing policy guidelines against states approaching foreign governments for relief. Vijayan should have consulted the Centre before making the foreign aid announcement. The 'diplomatic error' denied Kerala an opportunity to get aid from the UAE," says a senior civil servant.
The chief minister has been pushing pending the infrastructure projects in the state since he took over. The GAIL pipeline project, delayed by more than 10 years, is now complete. Over 99 per cent of the work on the Koodankulam power transmission line is also over. Kochi Metro too met with minimum delays.
What has not made much headway is the Smart City projects in Kochi and Thiruvananthapuram. Even after four years, the Kochi smart city project remains in limbo. So too the case of doubling of railway tracks in the state. Work on the Shoranur-Thiruvananthapuram stretch started 25 years ago and is still not complete. Lack of funds and delay in land acquisitions have delayed the projects.
The situation is compounded by the Left's dwindled numbers in the Lok Sabha. It has only one CPI(M) MP from the state in the lower house.
If the situation continues as it is, Kerala will be in a financial crisis soon. It also needs big money to tide over the fallout of the deluge that destroyed the state in August 2018.
Some of its grievances are genuine too. The national highway widening is a major area where the state got a raw deal despite the sympathetic attitude of Union minister Nitin Gadkari. Even after handing over 992 hectares of land for widening of 1781.5 km of NHs in the state, NHAI delayed tender proceedings. In the past 14 years, NHAI has constructed just 256 km roads in Kerala.
Fisheries is another area where the state can't catch a break. Under the blue revolution projects launched in 2016 for ensuring integrated development of the fisheries sector, Kerala, a state with a 560-km coastal line received just Rs 11.5 crore in 2017-18 when neighbouring Tamil Nadu was allocated Rs 110 crore. Uttarakhand, with no coast, got Rs 10 crore. Is it any wonder that God's own country is fuming?
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