People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 36

September 05, 2010

Strengthening Basic Sectors


Pinarayi Vijayan


 IT is widely accepted that the shortcomings regarding the production and productivity in industrial and agricultural sectors in Kerala are a vital drawback to the state’s development. The UDF government miserably failed to act by keeping this fact in its consideration. And at the same time it did not hesitate to mortgage the agricultural sector to the imperialist driven globalisation and thus made a significant cutback so far as the government spending in agriculture sector is concerned. During the 9th plan period 7.2 per cent of the state’s total plan outlay was allocated for agriculture. It was drastically reduced in to 4.5 per cent during the UDF regime- the 10th plan period. Such a policy ultimately resulted in the massive suicides of farmers where more than 1300 farmers committed suicide in Kerala during that period. The plantation sector in the state remained closed and the government procurement schemes have been completely sabotaged.




The present LDF government ardently intervened in agricultural sector to facilitate to intensify the overall development of the state. While the countrywide growth rate in agriculture showed a negative trend, in Kerala it registered a growth rate of 2.8 per cent. The LDF government’s persistent initiatives in agriculture sector resulted in the increasing production and productivity in agricultural produce. The farmers’ suicides have absolutely been halted. The government as an immediate measure granted an aid of Rs 50, 000 to the families of the farmers who committed suicide. The Kerala Farmers' Debt Relief Commission Act, a model for the whole country, has been enacted to ensure relief to the debt ridden farmers.


The paddy cultivating areas in the state was shrinking. The state had to depend more on neighboring states for its food requirements. As the paddy cultivation became unattractive and unviable, vast areas of paddy fields were lying fallow and the UDF government was insensitive towards such a worrying situation. The LDF government immediately intervened and several schemes have been introduced to regain the vibrancy in the paddy cultivation in the state. And consequently 15,000 hectares of uncultivated paddy fields have presently been rejuvenated for paddy farming. The government offered interest free loan for paddy cultivation. While the UDF government procured paddy at Rs 7 per kilo, the LDF government procures it with highest procurement price at Rs 12 per kilo. It is the highest price given for paddy in the whole country and the central government presently procures it at Rs 10 per kilo. Paddy protection insurance scheme in its new form has been launched and the premium amount has been reduced from Rs 250 to Rs 100 and the compensation has been doubled from 5000 to 12,500. The government devised the policy to ensure food reliance through food security scheme and thus augmented the cultivation of food production such as of paddy and vegetables. The government in 2009-2010 alone had allocated Rs 36 crores to achieve this objective. In order to protect the paddy fields from being converted through land filling, a law has been enacted during this period. What is more, a pension scheme has been launched namely ‘Kisan Abhiman’ scheme that offers monthly pension to the paddy farmers. Numerous measures were taken to protect the coconut farming also and hence unlike the UDF period the government procured the coconut including the green coconut by fixing a higher price. The government also decided to revise farm workers’ pay along with the government employees pay revision.




The UDF government in its policy had emphasised the need for privatisation of the PSUs for the growth of the state. The Chaudhary commission report recommended the privatisation of the public sector units and the UDF government on the basis of the recommendation had closed down 25 PSUs in the state. On account of the stringent protests, the UDF government could not privatise such units but deliberately left them to die a natural death. The industrial production also had diminished precipitously to a tune of 3.9 per cent. A sharp decline was registered in the total number of factories and workforce. During 2000-01, 4,40,085 workers were employed in 18,544 factories in the state.  It dwindled to 17,876 factories and 4,01,534 workforce in 2004-05. During that period 64.08 per cent of the factories were sick units and all the PSUs together made a total loss of Rs 69.49 crores.


During the present LDF period such a pathetic state of affairs has been completely reversed, thanks to the persistent efforts being made with its alternative policy. Presently 32 PSUs are made profitable and the rest five units show steady improvement by reducing the losses every year and thus move towards profit-making. During the initial year of the LDF government itself, the PSUs made a profit of Rs 91.94 crores. In 2008-09, it had increased to Rs 169.45 crores and in the current year it has again increased to Rs 239.75 crores! Unlike the neo-liberal agenda of the central government that dismantles the public sector units, the LDF government has set up seven new PSUs in the state and had shown the alternate policy at work during the current neo-liberal times. The Malabar Spinning Mill which was closed by the UDF government was reopened and the Balaramapuram Spinning Mill which was under liquidation has been handed over to the Kerala State Textile Corporation as part of the revival scheme of the government and is effectively rejuvenated. The Kerala Soaps and Oils Ltd (KSO) that closed down during the UDF regime has now been reopened by registering a new company namely Kerala Soaps and has already started the soap manufacturing. The laid off workers in the Keltron Counters Ltd, another company under liquidation were protected by appointing them in the Keltron. The Kerala State Drugs and Pharmaceuticals Ltd (KSDP) in Alappuzha district has been revived.  Associating with the central PSUs like the NTPC, SAIL, BHEL a joint venture has been initiated for the revival and modernisation of the state PSUs in upgrading the technology and ensuring better professionalism in administration. Expansion and modernisation projects were accomplished in the PSUs like the Textile Corporation, KEL, Keltron, Kerala Ceramics, Malabar Cements, and KMML. A joint venture agreement has been signed by the government to start a rail bogie manufacturing unit jointly by the Indian Railways and the Autokast Ltd. Measures were taken to set up the HAL’s strategic electronics manufacturing unit at Kinfra Industrial park at Seethangoli in Kasargod district. In Palakkad district, a manufacturing unit of the BEML has been set up.


The state government’s endeavor to safeguard the public utility services such as the Kerala Water Authority and the KSRTC was extensively appreciated. The government abandoned the Rs 1,006 crores payable to the government by the KWA as loan interest and the loan amount of Rs 840 crores has been converted as deposit without interest. The government also had written off Rs 700 crores, the outstanding tax dues of the KSRTC and given up the outstanding interest of Rs 153 crores. And the government that is committed to protect the PSUs, further more converted the loans given by the government as shares in such PSUs. Thus the LDF government’s effort to strengthen and broaden the PSUs shows how the alternate policies crafted astounding accomplishment at a time when the central government is pursuing a policy of dismantling the public sector undertakings.


While strengthening the PSUs, the LDF government also endeavors to ensure private investment and has targeted to ensure a total investment of Rs 10,000 crores in various sectors. A project to ensure an industrial park in an assembly constituency was launched and hence within four years 17,140 small scale industrial units were established and 1,13,293 new employment opportunities were created in the state. In order to achieve the objective of the rapid industrial development, it is inevitable to augment the industrial infrastructure and hence the Infrastructure Kerala (InKEL) was established by the government. The government also intervened in the newer areas of development such as the IT and the tourism sectors. IT parks were established in all districts and endeavors are on to set up the IT parks in all assembly constituencies. New companies have commenced in the Info Park and the Techno Park. Kerala had won the national tourism award for its best performance in the tourism sector and also the Galileo award for the best tourism Board.




It is inevitable to ensure electricity for the industrial development and it has a very significant role in this regard. The central government policy was to privatise the power sector. Thus, the state government had to confront with the central policy to retain the KSEB in the public sector. The previous LDF government had successfully halted the menace of the power cut and load shedding by setting up numerous power projects using various sources to generate the electricity. But the subsequent UDF government miserably failed to ensure electricity to meet the growing demand because of the absence of farsightedness and vigor. It is to be noted that while the previous LDF government could generate 1,086 MW of electricity, the subsequent UDF government could generate a mere 26.5 MW of electricity.


The present LDF government endeavors to proceed on the basis of the policy made by the previous LDF government. As a result, unlike the UDF period, the power sector attains a new momentum. Numerous power projects have already been initiated and hence within five years it can achieve the target to generate 500 MW of electricity. Another set of power projects have also been set up to generate 3000 MW to be commissioned with in a period of 10 years. The government has already prepared a master plan of Rs 1,800 crores to augment the transmission and steps were taken to reduce the transmission loss. The government also implemented a project as part of energy conservation and thus distributed 1.5 crores of CF lamps. Apart from the traditional energy resources, the government could successfully exploit the potential of the wind energy and thus 33MW of electricity has been generated. To facilitate the target of total electrification, a project has been executed by giving one crore rupees to each constituency. Total electricity target has already been achieved in 29 assembly constituencies and in another 80 constituencies, intensive efforts are going on to achieve the target soon. And hence, Kerala moves towards the target of ensuring electricity for all, the first state in the country that achieves such an objective.


The government endeavors to ensure progress in the fundamental areas of development such as the agriculture and industry. Obviously it is very significant to ensure abundant electricity for further development in agriculture and industry and thus the government is aiming at innovative projects in power sector also. The fundamental perception of the LDF government vis-à-vis the development of Kerala is to ensure growth in production and productivity in both the agriculture and industrial sectors and indeed it is highly delightful that such an amazing target is almost accomplished during this phase itself.



[To Be Continued...]