Welcome thrust to infrastructure development’

Mar 20, 2012 - V.K. Vijayakumar |

Kochi

If the slow pace of economic growth in the state was a matter of concern during the 80s and 90s, there has been a welcome change with state overtaking the national growth rate.

And the state’s growth rate has been projected at an optimistic nine per cent, much above the national scenario.

The revenue buoyancy is most welcome as it makes the state government afford to spend. However, there is a deficiency in this which is typical of the state; it is consumption and remittance-driven growth, without much contribution from the manufacturing sector.

Growth in the state has always been in the service sector, mainly transport, communication, trade, hotels and restaurants.

It is in this backdrop that the budget should be viewed where the thrust has been given to infrastructure development.

The allocations for the Kochi Metro, high speed rail corridor and mono rail are indications of the government thrust, which is indeed welcome and will decongest the state.

In the back drop of the propensity of people of Kerala to migrate and future prognosis of shortage of human resource internationally, the proposal in the budget to include skill development in school curriculums is a step in the right direction. If implemented properly, the scheme can go a long way in strengthening the human resource in the state.

However, I am sceptical about the allocations in agriculture since the focus is on traditional sector like paddy cultivation when all know the practical difficulties.

Paddy cultivation is no longer a rational choice and it will make little sense to dump funds on something that people would not want to pursue.

It is common sense to raise the pension age which was fixed when the life expectancy was low. But now with an average life expectancy of 76 years and when the previous government had taken the initiative through unification of pension date, the present move is only logical.

(He is an economist and investment strategist, Geojit BNP Paribas. As told to Ajayan.)

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