India Business
Kerala budget promises to attract diaspora funds
Mar 9, 2007 - 5:00:12 PM

Thiruvananthapuram, March 9 - Kerala Finance Minister Thomas Isaac Friday announced the budget for fiscal 2007-08, saying it would help in tapping the remittances worth some Rs 200 billion by non-resident Keralites - to build infrastructure in the state.

'In the coming fiscal, we propose to begin a new company to tap the remittances of NRKs to build IT infrastructure in the state. For this I have set aside Rs.1 million,' Isaac told reporters here after presenting the Left Democratic Front - government's second budget in the assembly.

Kerala has a record two million people working abroad, who remit close to Rs.200 billion annually to various banks in the state.

These remittances are 1.74 times the revenue receipts of the government and seven times what Kerala receives from the central government every year.

'To raise the funds, we are working out schemes through the Kerala State Financial Enterprise so that NRKs can participate in chit funds while sitting abroad,' said economist-turned-politician Isaac.

He also said that steps would be taken to see that a new welfare fund is set up for the NRKs and they were waiting to see what the central government would do in this front. In the event the union government fails to do anything, the state government would go ahead.

Isaac said they decided to form the proposed IT infrastructure company after receiving positive response from the NRKs.

The new company, Infrastructures Ltd Kerala, is being formed on the lines of Cochin International Airport Ltd through private-public participation, he added.

The finance minister's second budget shows an overall deficit of Rs.5.22 billion. As a result, prices of cigarettes, all textiles except khadi, a cess on every Rs.25 bus ticket and life saving drugs all would go up.

In the IT field Isaac has set aside Rs.673 million that includes the development of Technopark and Infopark, a new centre for free software besides setting up of new IT parks in most districts of the state.

Tourism is also another sector that has got substantial allocation in the new budget. Rs.1.08 billion has been set aside which includes development of new tourism projects in north Kerala.

However, the opposition expressed disappointment over the budget.

'What is shocking is that Isaac is silent on programmes for poverty reduction. No step has been taken to tackle the price rise, increasing the motor tax on vehicles, inadequate allocation and lack of innovative schemes in sectors like agriculture and fisheries. In short, the finance minister is just dreaming that his budget is good,' leader of opposition Oommen Chandy told reporters here.

Isaac, however, defended his budget, saying it has lots of promise and has addressed all sectors in the most just and equitable manner.

'Yes, the tax on tobacco has gone up and with regards to liquor, it has not. Anyway, we will wait and see what needs to be done on the liquor front,' he added.

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