People's Democracy

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


No. 29

July 17, 2011



Lame-Duck Budget with Intensive Neo-Liberal Agenda


K Rajendran


WHILE in the beginning the people of Kerala had expected benevolent governance in view of the wafer thin majority of the present UDF government, its functioning so far has proved to the contrary. This became clear from the moves to demolish the world renowned three-tier decentralised system of government and recently from the budget presented by the finance minister K M Mani.


While even many of the anti-communists have admitted that the land reforms implemented by the first EMS ministry during 1957-59 created a basis for the social justice oriented development paradigm of Kerala, irrespective of which front ruled the state, attempts have begun, as is currently happening in West Bengal,  to dilute or destroy the tenets of land reforms. These began with the first budget of the UDF government, with K M Mani proposing to exclude certain kinds of agriculture land from the purview of the forest and environmental laws, on the pretext of humanitarian considerations. The budget also allows utilisation of 5 per cent of land in the closed or unutilised plantations for other purposes, which may come as a great boon for the real estate mafia who have poured crores of rupees to ensure the victory of the United Democratic Front (UDF). This comes at a time when the state is facing a huge food shortage as well as shrinkage of the forest land. While the state witnessed a rapid growth in food production during the tenure of LDF government and farmers who had earlier abandoned paddy cultivation returned to the fields, the trend is likely to face a reversal following the latest budget. Earlier, even though the LDF government faced severe financial limitations because of the step-motherly attitude of the central government, it granted to the farmers of Kerala then the highest Minimum Support Price for paddy in the country. Before 2006, Kerala figured in the list of the states where debt ridden farmers were committing suicide but not a single such case was reported here during the five years of the LDF rule. But now the policies of the present government threaten to scuttle the gains that were made under the earlier government.


Earlier, virtually all the Keralites were ensured some or other welfare measure by the LDF government. With the EMS Housing Scheme, a most popular one of its kind, the state had been heading towards a situation where not even a person would be without a house. Tens of thousands of poor Keralites were to be the main beneficiaries of this project. But, surprisingly, the new budget has put a full stop to the EMS Housing Scheme. Mani has also put an end to several of the LDF initiated schemes like Rs 10,0000 deposit for each newborn child, enhancement of the BPL list to 40 lakh people, 25 model fishing villages, the pension scheme for unmarried women, and the welfare scheme for housemaids, to name only a few. At the same time, he has either dropped or stopped the allocation for as many as 32 ongoing projects begun by the earlier government. While Mani talked of initiating a medical insurance scheme and an employment generation scheme, the nitty-gritty of these schemes have not been revealed so far.


In its manifesto for the last assembly election, the UDF had promised a Rice for One Rupee Scheme, in place of the popular rice distribution scheme initiated by the V S Achuthanandhan led LDF government. Now, instead, K M Mani has announced a rice distribution scheme which would bypass at least half of the BPL families of Kerala. It has a meagre allocation of Rs 2 crore only.


The last five year tenure of the LDF government showed to the nation how to make the public sector industries viable and profitable; in its last budget the LDF government also announced the launch of five new public sector undertakings. But K M Mani did not allocate a single penny in this regard, and has made explicit the attitude of the UDF government towards the public sector. It is clear that even the profit making PSUs are now on the brink of privatisation.


The LDF government took a keen initiative for attracting private investment. The then finance minister, Thomas Isaac, put forward a road development project worth Rs 40,000, which the investors widely appreciated and all of them offered it unequivocal support. But it seems it is going to be a thing of the past.


The UDF budget has also neglected the fishermen and the development of seashores, fully ignoring the Kuttanad package. This led to public outrage against this move and  people in the seashore district of Alappey observed a half-day hartal against it. While K M Mani sought to meet the allegations by talking of “political vendetta” against him, the fact remains that many of the Congress leaders, MLAs and MPs too have publicly denounced the budget with the allegations of discrimination.


In sum, a paradigm shift from the left to the right is very much on the anvil, and one would be keenly watching the unfolding of its consequences for the state.