Tuesday, February 26, 2013

Kerala Budget 2013 - An Open Letter to FM

Dear Minister,

History reckons with you for the most number of Budgets presented in the world. You are an experienced craftsman presenting the budget in a mercurial way. Your experience in politics and administration are unparalleled and presents a unique opportunity for researchers and practitioners to delve on the language, intend and vision of your Budget Speeches. You have seen generation after generation  not only on the floor of the House but also the Political turbulences' since independence. As a Public Policy Student I have great admiration for your skill sets as a Minister and a Politician. 

I am sure this letter may not surprise you on its content side. I wish to share my specific thoughts in certain areas on the upcoming budget of Kerala. These thoughts are based on my readings, interactions, observations and experience working with different clients over the years.

I do not have to spend time on explaining Kerala Model of Development to you. Those who studied on the model have stated 'Second Generation Problems' that Kerala face today. I will go one step ahead and call it as 'After the Welfare State' Paradigm for the problems that we face today. Kerala has notorious balance sheet for the money spent on pensions, salaries and perks. Though I welcome your recent steps for reforming Pension sector, I must confess that many in Kerala hardly have the details of the proposed reforms. I wish you would explain the pension scheme in detail in your budget speech. 

We have a very upward looking middle class with a significant size in the population. Somehow, for all these years, the welfare and socialistic pattern of policies implemented in Kerala has led to an approach of 'One Size Fits All' kind of attitude. In my opinion, it has resulted serious damage to the growth and development of the State. Most often, it has been the Public policy driven rather than  growth driven. While there is hue and cry about the subsidies at the national level, we are very much silent about it. Service delivery at a cheaper rate and not indexed to the inflation has pushed Kerala economy to an impoverished state. At the same time, it has been taught that the Government is responsible for everything and especially ensuring the services irrespective of its size, volume and content. I believe the Budget is a golden opportunity to discuss the service delivery in depth and to create awareness that while the Government ensures the services, it cannot be the provider or guarantor for all sorts of service delivery. Unfortunately, in Kerala there is no target approach.
Water or electricity, they were given at the cheaper rate to everyone irrespective of their income background.

I wish the upcoming budget will propose a road map how separate strategies for poor and rich will be incorporated in the coming years. Kerala's fiscal imbalance is largely due to this 'One size fits for all' approach. Another important step would be the announcement of Disinvestment in Public Sector Undertakings of Kerala. Not getting into the debate of CAG reports, I am sure most of these companies are either irrelevant or lack expertise in the modern times. Rather than allowing them to suck tax payers, the Government shall set the process to dis-invest in those companies. The image of Kerala State Government being the largest entrepreneur in this part of the world do not auger well for the future of the State. 

There is lack of acceptance or cohesion from the part of the leadership on the urbanisation processes. Though there are attempts to improve the infrastructure, most of them are happening separately and independently failing to see through inter connectivity and dependence.

What Kerala requires is the vision for Kerala 2030 - God's own Kerala metro state. Same is the case with the opening up of the sectors like Education and Health creating opportunities for the investors from India and abroad. In both the cases, Kerala has achieved the minimum quality many years ago. But we failed to take them to the next level where the competency and skills are taught. In Higher Education, the present Government should invite reputed foreign universities to set up their campus in Kerala. The budget provisions can facilitate the role of micro health insurers in the market.

The Urban Local Bodies shall be strengthened not by pumping more money but by building the capacities required for an effective Local Self Government. Mayor can be the CEO of the urban Kerala.

Not many have forgotten that the present State opposed the opening up of retail shop (aka FDI in retail) in Kerala. The guidelines at the national level ensures that Kerala cannot have more than 2 or 3 shops. Then why does Government oppose the move? I am sure retail entry in Kerala will expose the general public to the realities of the modern times that would lead to the destruction of psychological barrier in everyone's life here. The question of who is superior among King and Pope will no longer be there. One will have the courage to say that King is Naked and that would be the historic moment for you as the finance minister.

I wish my recommendations get reflected in the upcoming budget.

Thank you

D.Dhanuraj