Kerala Finance Minister KN Balagopal hopes that the Union Budget 2022-23 will include special aid to adequately support the “countercyclical measures” taken by state governments in their efforts to boost economic recovery.
In a pandemic situation, state governments must adopt such measures to put the economy back on the road to recovery. Kerala has already expanded the social safety net through higher allowances for a variety of social benefits, Balagopal said.
These include social security pensions, social welfare board pensions, as a courtesy payments to vulnerable sections, higher spending on free medical care, free/subsidized food grains and free grocery kits, sector support programs and capital expenditures.
Case of infrastructure expenses
In a memorandum already delivered to the Union Finance Minister, he said it was imperative to increase infrastructure and investment spending to give more momentum to economic recovery. It is in this context that the government of Kerala has mentioned a semi-fast train project (Silverline) of 529.45 km linking Kasaragod and Thiruvananthapuram.
This is to be implemented through the Kerala Rail Development Corporation, a joint venture of the state government and the Ministry of Railways. Balagopal requested central support for the project and accelerated approvals.
He also demanded state-specific packages in the Union budget to rejuvenate production and quality employment in sectors such as agriculture, agro-processing industries, micro-small and medium sectors and d other unorganized service sectors in the state.
Capital incentives sought
Balagopal has also sought capital incentives for intra and international collaborations for vaccine manufacturing and medical device research in centrally sponsored projects. He recalled that the Union Budget 2021-22 had earmarked ₹35,000 crore for the health sector. An allocation to States can be made from this amount.
Meanwhile, Bijoy P Pulipra, a leading business and finance professional, said the Union budget could seek to limit potential damage to productive sectors by opting for fiscal expansion financed by public debt. higher.
In order to stimulate the growth of the economy, the budget could adopt a countercyclical fiscal policy to spend more. Drawing a parallel, he said that after the Asian financial crisis (1997-98), the growth of the Indian economy slowed to an average of 5.3 percent in real terms. But the government has opted for an expansionary fiscal policy focused on infrastructure spending.
Government spending rose steadily over the ensuing years, leading to public debt reaching record highs. This had helped the economy recover at a much faster pace. The increase in productivity helped to generate more taxes and therefore to reduce the debt. .
J Hareendran Nair, Founder and Managing Director of Pankajakasthuri Herbals India, said the pandemic has emphasized Ayurveda’s effectiveness in securing and maintaining long-term health. In the two years of pandemic so far, people in India and abroad have embraced Ayurveda like never before.
TPS on Ayurvedic medicine
But the industry has faced a shortage of raw materials, driving up production costs, Nair said. Ayurvedic medicine’s TPS rates ranging from 6-18% have been a major drag in this context.
“It would be desirable for the Center to encourage and support the cultivation of medicinal plants and reduce GST rates on finished products. Alternatively, he can announce measures to attract more global and domestic investment in Ayurveda,” Nair said.
January 31, 2022