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Centre, States must share fiscal responsibilities to deal with crises, especially in health: Kerala Chief Minister

Nandana James Mumbai | Updated on August 16, 2020

From floods to virus outbreaks, the coastal state of Kerala has been battling multiple back-to-back crises in the last few years. The Communist Party of India (Marxist)’s Pinarayi Vijayan has been spearheading Kerala through these crises ever since 2016, when he came to power as the State’s Chief Minister. But, recently, there have been murmurs about how the hailing of the ‘Kerala model’ of tackling the pandemic has been premature due to cases increasing exponentially from a few months ago. In an email interview with BusinessLine, Vijayan shared his thoughts on the challenges being faced by the State. Excerpts:

How would you assess the government’s performance so far?

It isn’t up to me to assess our government’s performance, but up to the people. However, we have had the unenviable task of steering the State forward amidst a series of challenges. No other government in the history of Kerala has had to face recurring challenges like this one.

We had inherited a legacy of stagnant revenues and rising revenue and fiscal deficits. By cutting down the borrowing limits of the State, and delaying the receipt of GST arrears and compensation, the Centre has created further hindrances in the State’s economic development. Yet, Kerala’s economy grew at 7.2 per cent under this government, compared to the 4.9 per cent during the previous government. As I said, it is for the people to assess all this.

There is a consensus that the celebrations hailing the ‘Kerala model’ were actually premature and that the State should have probably tested more or adopted a different strategy as people from other States and countries started flocking in. What is your response to this?

I had said before that fighting this pandemic is like running a marathon; each leg matters, and above all our endurance. Despite restrictions having been eased throughout India, we aren’t seeing a spike like we see at the national level and we are still doing extremely well in comparison to the rest of the country.

Therefore, I think that the Kerala Model has to be acknowledged in that regard, and rightfully so. As far as Case Fatality Rate (CFR) goes, it has in fact fallen considerably. Our Test Positivity Rate is still among the best in the country. We still trace contacts and strictly ensure quarantine even for secondary contacts. In fact, through CFLTCs and specialised Covid-19 hospitals, we’ve only ramped up our fight against the pandemic in this third phase.

How would you describe Kerala’s current strategy and action plan to combat the rising cases of Covid cases?

Let me reiterate, Kerala’s Case Fatality Rate has fallen. May 8was the end of the second phase as we’d flattened the curve and our CFR was 0.59. As on August 11, at the peak of this third phase, our CFR is at 0.32. It has almost halved. At present, our strategy is to protect lives and livelihoods.

I’d just mentioned about the additional infrastructure that is being set up to tackle the disease. Containment is being imposed wherever fresh cases are being reported. This will help reduce the incidence. At the same time, life has to go on. Therefore, strict adherence to Covid-19 protocol is mandated across the State. This will enable the general public to go ahead and earn their livelihood.

In the midst of a pandemic that doesn’t seem to abate, the State is also faced with floods and landslides. How is Kerala facing all these challenges right now?

In the face of a double disaster, the pandemic and the floods, relief camps were set up following the Covid-19 protocol. Evacuation of people from disaster prone areas was also conducted following the protocol. Two initiatives require special mention with regard to this - our interventions in Pamba to remove silt and debris and in Thottappally to widen and deepen the estuary. This was done despite the Opposition’s campaign against it. Unfortunate and unpredictable incidents like landslides have taken lives. But otherwise, as evident, we have been able to manage quite well.

Our focus in the upcoming days is on ensuring food security through the Subhiksha Keralam programme and protecting livelihoods through the Vyavasaya Bhadratha scheme. There are 1.56 lakh small enterprises in the State. This is 70 per cent of the total enterprises. A total of 40 lakh workers are employed in this sector alone. We have announced an assistance of 3,434 crore for MSMEs through the Vyavasaya Bhadratha scheme.

The general consensus is that the world is going to be different post pandemic. What are the changes that we should bring out regarding governance, policy making, and health and safety?

The Covid-19 pandemic has necessitated a rethinking of the contours of State intervention, especially in social sectors like health. The argument for rolling back the State has become questionable even among the proponents of free market. Kerala’s experience shows how public investment in healthcare and a participatory mode of governance with empowered local governments can help in pandemic mitigation. A truly federal set-up with shared responsibilities between the Centre and the States is better suited to deal with situations like the present one rather than a centralised system. This should be the period in which we end fiscal conservatism. Primary needs of citizens like food, shelter, health, education and employment should get primacy. The country’s welfare lies truly in its citizens’ welfare.

The effect of these crises, particularly Covid-19, on Kerala’ finances has also been a topic of discussion. What has been the cost for Kerala in managing the virus?

This is truly a period of low income and high expenditure. As I said, fiscal discipline should not be top priority. Borrowing should be encouraged so that spending on social sectors can be increased. Therefore restrictions related to it should be eased. GST arrears and compensation should be paid forthrightly by the Centre. It is the States’ right.

We need to note that a State like Kerala does not even get 50 paise from the Centre, for every rupee that it raises as revenue. This asymmetry has to be rectified.

Published on August 16, 2020

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