Opinion Pinarayi Vijayan writes: Kerala has an alternative model for India

Kerala has already shed some of the tags that vested interests had attached to it in the past — that it is an investor-unfriendly state and has little to show for productive output or the needed resource mobilisation to trigger growth.

Kerala has shattered all such myths by consistently improving its performance in production, resource mobilisation, technology absorption and productivity. But, at each step, Kerala is confronted with heavy odds — especially in the matter of financial transfers from the Centre and the calculated attempts to strangulate the state fiscally by reducing its borrowing limit drastically. The state is currently faced with a serious fiscal liquidity stress due to the reduction in annual borrowing limit, by as much as Rs 8,000 crore, stoppage of GST compensation, resulting in a loss of around Rs 10,000-12,000 crore, reduction in revenue deficit grant during the current fiscal by around Rs 8,400 crore, as compared to last year, and reduction in the inter-se distribution from the divisible pool during the 15th Finance Commission (1.92 per cent) compared to 10th Finance Commission (3.875 per cent).

The decision to include resources raised by the Kerala Infrastructure Investment Fund Board (KIIFB) for the state’s much-needed infrastructure development within its borrowing limit has not only put the state’s finances in jeopardy, but has also dealt a blow to its infrastructure growth.

For us, every challenge is also an opportunity. Thus, we have focused our attention on fiscal consolidation through augmentation of our own revenues and rationalisation of expenditure. We have succeeded in limiting the fiscal deficit to well below 3 per cent of GSDP in 2022-23 and revenue deficit as a proportion of GSDP to 0.9 per cent. We have done this without wavering in our commitment to provide succour to the very needy in society.

We could, simultaneously, raise our tax revenue by 22.4 per cent during 2021-22 and 23.4 per cent during 2022-23. This growth rate in the state’s own tax revenue ranks as the third-highest among all states.

Only two states, Maharashtra (25.6 per cent) and Gujarat (28.4 per cent), which have a strong manufacturing base, outperformed Kerala in this respect. Kerala has also witnessed a sharp increase in Goods and Services Tax (GST) revenue with an average monthly revenue of Rs 3,000 crore now. The monthly GST revenue was just Rs 1,700 crore in 2017-18, the year in which GST was rolled out, and the current figures mark a remarkable 76 per cent increase in monthly GST revenue.

Kerala’s strength lay in the fact that it has always been a knowledge society, founded on a high literacy rate, universal primary education, high Human Development Indices (HDIs), inclusivity in all walks of life and a broad spread of physical and digital learning infrastructure — with a firm commitment to protect and nurture secular values and an objective and scientific understanding of history.

Today, Kerala is forging ahead to become a fully digitally-empowered knowledge economy that is ready to take on the latest challenges in teaching, learning and research in new technologies and their application in diverse fields.

We have already entered into tie-ups with nations, cities and global institutions to lift the quality of higher education and healthcare.

These are, thus, transformative days for Kerala. We have succeeded in building on our strengths, particularly in areas such as education, healthcare and local governance, and shedding quite a few shibboleths to embrace the demands of the changing times in areas such as infrastructure development and investment promotion.

In the IT sector, for instance, the government is contemplating establishing private IT parks, establishing four IT corridors in the coming five years and creating co-working spaces in small towns, providing them with the assistance currently being given to IT startups.

Kerala would now rather look at each challenge as a responsibility. Prime among these is the responsibility to keep the state an oasis of free speech and expression, a space where everyone gets to articulate their views, live their lives and go about producing goods and offering services absolutely free from any oppressive diktat — religious or political.

Kerala has refused to allow divisive communal and religious agenda to strike roots and the government has been proactive in nipping any such attempt in the bud. The state has also welcomed with open arms students who wished to leave their trouble-torn homesteads in other parts of the country to live and study in colleges and universities in Kerala.

Now it is time to celebrate the many positives in the true Kerala story and we welcome all who are interested in experiencing first-hand what Kerala is really all about, to be in Thiruvananthapuram in the first week of November to be part of Keraleeyam, a week-long showcase of the many advantages that the state has to offer to all those who are in search of ideal spaces for business, investment, leisure and scientific, cultural, creative pursuits. Our plan is to make this an annual event so that we can facilitate new interactions, cooperation and convergence.

The writer is Chief Minister of Kerala