A mark-up of around 50 per cent over the Tenth Plan outlay in real terms

Our Bureau

In the area of agriculture, the most immediate measure is the provision of debt relief for which the State Government is setting up a Debt Relief Commission.

Thiruvananthapuram, Aug. 31

The draft approach paper has put Kerala's Eleventh Plan outlay at Rs 35,000 crore, which is a mark-up of around 50 per cent over the Tenth Plan outlay in real terms.

The figure is based on the assumption that a number of items on the receipts side such as negotiated loans, SLR-based net market borrowings and normal central assistance remain frozen at their 2006-07 level.

The paper says that the figure also assumes that no externally aided projects are undertaken in the State during the Plan period. As the Centre considers the State as `debt stressed', such projects stand barred as of now. However, the Plan outlay will increase correspondingly, if the bar on these projects is lifted either through negotiations or through the State's debt-GSDP ratio bettering the Central `norm'. Again, the actual outlay undertaken within the State will go up considerably if the Centrally sponsored schemes are also taken into account, says the paper.

debt relief

In the area of agriculture, the most immediate measure is the provision of debt relief for which the State Government is setting up a Debt Relief Commission. The commission will approach the problem on a case-by-case basis; negotiate debt waiver by banks; fix the amounts payable to the private moneylenders; and recommend debt write-off in cases of destitution where the State Government may take over the debt.The paper feels that debt waiver cannot be the only solution to the woes of the agriculture sector. For one, farm production has to be made remunerative and this could be immediately achieved through price-support mechanism, backed by appropriate tariff protection.

Entry of corporates

The paper points out that the main organisational change currently looming on the horizon is the entry of corporate players, including multinational corporations, into the farm sector on the concept of contract farming. But, this will have a number of adverse consequences like the corporates passing on low prices to the peasants and the undermining of food security with profitability being the decisive determinant of land use pattern.

An alternative to this is the formation of cooperative organisations of growers with Government support and participation. If at all corporate capital is allowed to deal in agricultural produce, then it should be asked to deal with the cooperatives rather than with individual peasants. The cooperatives should also encompass `group farming'.

The paper admits that there is no alternative to introduction of technological change in agriculture. But such changes should raise the yield per acre and are not labour displacing. If they do lead to displacement of some labour, it should not cause unemployment, but work sharing within a cooperative framework.

In the tourism sector, investment has to be stepped up. Since such investment depends upon the complementary development of physical infrastructure, the State Government will have to step up its outlays in the relevant areas. However, this requires a careful handling of the potentially explosive issue of land acquisition.As for industry sector, while the State may have to engage itself directly in certain projects, space has to be created for private investment through creation of adequate infrastructure and a suitable investment climate. In the IT sector also, flow of private investment has to be encouraged with the Government playing a supportive and monitoring role, says the paper.

(This article was published in the Business Line print edition dated September 1, 2006)
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