Budget evokes mixed response in Kerala

THIRUVANANTHAPURAM - The general budget proposals for 2011-2012, presented by union Finance Minister Pranab Mukherjee in Lok Sabha Monday, evoked mixed response among political and corporate leaders in Kerala.

Despite a number of allotments for the state announced in the budget, the silence on the proposed Kochi Metro Rail project came as a surprise to the ruling Left Front.

P. Karunakaran, Lok Sabha member of the Communist Party of India-Marxist (CPI-M), said it was disappointing that the Metro project was left out from the budget.

All the 20 law makers from Kerala had met the union urban development ministry authorities to speed up the Metro Rail project, but the efforts have come to naught, he said.

“This was one major project that the people of the state were looking forward to and it got no mention,” Karunakaran said

The major budget allotments benefiting Kerala include a Rs.600 crore Haj subsidy, doubling of monthly honorarium for Anganwadi workers, special fund allocation for various units like the Indian Space Research Organisation (ISRO) centre as well as the Rs.555 crore package for the tea, coffee, rubber and spices sectors.

The ISRO centre at Veliyamala on the outskirts of the capital city was sanctioned Rs.314 crore.

The Marine Products Export Promotion Development Authority in Kochi has been given Rs.110 crore and Cochin Shipyard was allotted Rs.40 crore.

Also, the newly set up veterinary university received an allocation of Rs.100 crore while the centre of the Aligarh Muslim University coming up in Malappuram got an allotment of Rs.54 crore.

V.K. Mathews, chairman of the Group of Technology Companies in the state, welcomed proposals such as changes in the income tax slabs and the implementation plan for the uniform direct tax code and goods and services tax by April 2012.

“However, the increase in minimum alternate tax (MAT) from 18 percent to 18.5 percent and non-extension of the software technology park (STPI) scheme would hit the IT companies operating in the state. The government should have kept the MAT at the levels prevalent internationally at one-third of the corporate tax,” said Mathews, who also heads IBS, one of the leading IT firms in the state.

Krishnan Ramachandran of Barjeel Geojit Securities said the proposal to allow foreign investors in the mutual fund schemes is going to be a game changer for the flow of foreign portfolio investment to the Indian equity markets.

“This move will now enable foreign investors to participate in the Indian equities markets in a very cost-effective manner,” said Ramachandran.

Barjeel Geojit Securities, hitherto predominantly NRI-focused, will now be able to widen its scope and range of services to the large and potential local investor base in the UAE and to other GCC countries, he said.

Former state planning board member C.P. John said the budget needs to be truly appreciated.

“You should note that five states, including Kerala, are going to the polls and there is not a single announcement just for the sake of announcing sops ahead of the polls. There is no gimmick. That is a huge positive aspect and it shows the seriousness of the whole exercise of presenting the budget,” said John.

According to CPI-M Rajya Sabha member K.N. Balagopal, the biggest disappointment about the budget is that Kerala did not get an IIT.

The budget only maintains status quo and does not provide answer to any of the problems the country faces, he said.

“There is nothing in it (budget) to address the problem of price rise and no serious effort to tackle the black money issue,” Balagopal added.