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STATES: KERALA
Change Of Perception
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ANTONY'S AGENDA
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In his first 100 days in office, Antony
has initiated several measures.
PRO REFORM: Antony harps on the virtues
of the private sector and liberalisation in all his speeches.
SECTOR OPENED: Sanction accorded
to 84 private medical and dental colleges. These were banned till
now.
DIVESTMENT: State Government equity
brought down from 51 to 26 per cent in Kochi International Airport.
FISCAL REFORMS: Agreement with Centre
on fiscal reforms to contain fiscal deficit to 4.5 per cent.
LABOUR LAWS: Legislation to control
exorbitant rates charged by loading and unloading labourers.
DOWNSIZED: State's annual plan for
Rs 3,600 crore submitted by previous government to Planning Commission
by Rs 585 crore.
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The chief minister's
earnestness seems to have impressed even the World bank. In the past the
Washington-based bank had been derided by almost all political parties
in the state, blamed for every ill afflicting Kerala. Says Vinod Thomas,
vice-president of the World Bank Research Institute: "Antony's is
a marked change in perception. There was a time when assistance from the
World Bank was looked down upon here. Today they are keen to take help
from us."
To a large extent, however, the Antony Government's
success will depend on its ability to rein in the state's militant trade
unions. The Government has already formulated a draft bill to amend the
labour laws, the most significant among them being the banning of extortion
fees by unions at truck depots. True, labour disputes and strikes have
been significantly declining in the state during the past decade, but
what has terrorised potential investor and the ordinary citizen alike
is the exorbitant fees that workers unions charge for loading and unloading
trucks. The UDF Government has now decided to officially declare as illegal
the extortion fees. "We have to change these outdated laws,"
said Babu Divakaran, the labour minister.
Antony himself concedes that Kerala's development
problems cannot be solved without massive private investment. "The
God's Own Country slogan is good for tourism. But this state is pauperised
and 42 lakh young people remain unemployed." He feels that the much
acclaimed "Kerala model" based on a welfare state where it has
made rapid strides in improving the quality of life is no longer sustainable.
"The model was suitable for a particular time in history. But even
to sustain the gains from the model we need private investment."
According to him the Government has chalked out projects worth Rs 50,000
crore for the next five years. That's a tall order considering that Kerala
attracted just about Rs 1,000 crore in investments last year, while in
neighbouring Tamil Nadu the investment hovered around the Rs 4,000 crore
mark. While NRK deposits form more than half of the state's total bank
deposits of Rs 40,000 crore, the credit-deposit ratio (CDR) of 40 per
cent shows that NRKs are still not confident enough to invest in the state.
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The
Karnataka chief minister has been among Antony's advisers.
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Kerala's business community sees positive signals
in Antony's new avatar. "We don't know how much it will percolate
to the bureaucracy and even the ruling party. But certainly a welcome
change in attitude is visible," says C.M. Jolly, chairman, Confederation
of Indian Industry, Kerala Chapter
Antony can take some comfort from the fact that
the Opposition Left Democratic Front (LDF) has not yet raised the familiar
war cry against his pro-reform measures. Some see it as a sign that the
communists have finally realised the state has no option but to overthrow
the baggage of the past and undertake radical reforms immediately. And
it is unlikely that the LDF will take to the agitational mode, since recently,
the CPI(M), the leading partner, sent a high power delegation to China
to study how easily that country adapted to economic reforms.
According to the World Bank's Thomas, this is
Kerala's best opportunity not just to sustain the gains it has made in
the social sector but to catch up with the other southern states in the
industrial and economic fields. What he left unsaid was that this was
perhaps the last chance for God's Own Country.
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