Crisis in Kerala

Sir, - The white paper on the Kerala Government's finances has highlighted the failure of the finance department and the Planning Board in planning, budgeting and budgetary control. The establishment had failed even in elementary cash management. Dr. Gulati was right in criticising the political leadership for raising loans through special purpose vehicles, outside of budgetary and plan resources. However, the State Planning Board was guilty on this count. On its own initiative, it had commissioned the feasibility study for Industrial Restructuring Fund. I, as honorary advisor to the Minister for industries and Chairman of KSIDC, resisted the proposal.

The emerging situation is even more disquieting. The finance department is pursuing a large foreign loan as the solution for the crisis. Negotiations were started by the LDF Government and conditionalities are being discussed. With the sort of financial indiscipline as alleged by Dr. Gulati, Kerala will be pushed into a real debt trap within a few years.

K. Vijayachandran,

Kochi

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Section  : Opinion
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