Kerala Budget 2021: Laptops for All, Focus on Employment and Higher Education

Kerala’s finance minister Dr. Thomas Isaac presented the Left Democratic Front (LDF) government’s final budget for this term on Friday, 15 January 2021. The budget speech was considered especially crucial considering the need to counter the economic impact of the pandemic. It was also significant considering the upcoming elections in the State this year.

The Finance Minister emphasised the goal of transforming Kerala into a knowledge-based society, "with strides in modern employment opportunities and industrial growth while consolidating [the state's] achievements in the social sector." Employment was a key focus area throughout his speech with targeted schemes for various sections of the populations. Among the major announcements were ensuring laptops for all families, a Rs.100-increase in social welfare pensions, more jobs in the education section and more institutions and a Rs. 1000-increase in the allowance given to ASHA workers. 

At a time when the issue of the Minimum Support Price has become a key site of struggle, the minister announced that Kerala will provide the highest MSP in the country for paddy farmers at Rs. 28/kg. Kerala, which is also the only State into the country to offer an MSP for vegetables, is looking at self-sufficiency in vegetable production too in 2-3 years.

The minister also announced that an additional 10 kg of rice will be provided at Rs. 15 to 50 lakh families which have blue and white ration cards. 

A key highlight of Dr. Thomas Isaac’s speech was the success of the public sector in Kerala. PSUs and the public health and education sectors have seen major revivals over the past five years, according to the minister. 

According to the Minister, the total receipts for 2021-22 are estimated to be Rs. 1,59,427.24 crore. The total budgeted expenditure for 2021-22 is Rs. 1,59,427.21 crore. Revenue deficit is estimated to be 1.93%, and fiscal deficit is estimated to be 3.5%.

The Economic Review that was released on Thursday highlighted the extent of challenges, especially the cumulative impact of a series of disasters including Cyclone Ockhi, two rounds of flooding in 2018 and 2019, and the Nipah and Coronavirus infections.

Just as in the case of the Indian economy, the economic slowdown affected Kerala as well. The state's economic growth rate in 2019-20 was lower compared to 2018-19, which adversely impacted tax revenues as well. The Covid-19 pandemic has meant a further contraction in economic activity across the world, and Kerala has been no exception. Hence the final revenue receipts in 2020-21 would be lower than last year's budget estimates.

But the Kerala Budget 2021-22 projects that revenue receipts would grow significantly in the coming year as the world, the country and the state recovers from the pandemic crisis, enabling a significant rise in the state's expenditure such as those on capital investments and welfare spending.

The Economic Review review noted that “the average rate of growth for the years 2016-17 to 2019-20 (5.4 per cent) was higher than the average rate of growth for the previous four years, 2012-13 to 2015-16 (4.8 per cent).”

At over three hours, the budget speech was the longest in Kerala’s history. The budget speech was punctuated with poems written by students from across the State that illustrated the points the minister was making.