IS it possible to have a regional alternative development strategy under the bourgeois-landlord federal state? The Left state governments in India have been prompted by such a positive vision and a successful case is that of Kerala.  Kerala has been able to provide its ordinary citizens the basic needs like education, health care, at least hutment land, housing, old-age social security and so on.  As a result, the quality of life of the people as proved by a number of human development indices is much above the national average. It has succeeded in abolishing worst forms of caste discrimination, ensure collective bargaining rights and carry out land forms. All these have been achieved within the present federal setup.  Of course, the origin of these distinctive features of Kerala’s development predates the emergence of the organised Left, in the social reform movements from the late 19th Century. However the credit goes to Left for carrying forward and expanding the aspirations of the people into a clear cut alternative development strategy.

The neo-liberal policies that are being pursued by the central government have further undermined the federal autonomy of the states and makes it harder to pursue an alternative development strategy.  Nevertheless, the Left that constitutes the dominant political combination in Kerala has not only addressed the immediate needs of the people but also provided an alternative development strategy to ensure rapid growth of productive forces.  It has been a popular argument of the right wing forces that the Left is good only for redistribution and has no agenda for growth.  Even eminent liberal scholar like K N Raj once half-jokingly told E M S Namboodiripad, “You Communists are good at distributing the cake. But you don’t know how to bake the cake. What Kerala today needs is to increase the production. You will have to make way for history”. It is partly in response to this challenge that E M S Namboodiripad convened the International Congress on Kerala Studies in 1994 and later took initiative for launching People’s Plan Campaign.  The new stirrings have today consolidated into a clear-cut alternative development paradigm in the third edition of the International Congress on Kerala Studies held in 2016. The conclusions of this Congress constituted the basis for the manifesto of Left Democratic Front in the 2016 Election.  The budget for 2016-17 has attempted to kick-start this alternative programme by proposing a host of new schemes and projects.

I would call the new strategy as that of walking solidly on two feet. One foot is comprehensive social security and welfare measures for the people, protection of the traditional livelihoods, public health and education and special programmes for the marginalised, including main streaming of gender.  Except perhaps for increasing concern about gender, Kerala’s development focus has always been heavily biased towards these social concerns. As we have already noted, Kerala has achieved remarkable successes in social sectors.  But a number of new, second generation problems, particularly, in health and education sectors have emerged.  These and special problems faced by certain marginalised sections have to be addressed. The Left cannot be worth its name if it forsakes these concerns.

But we cannot hop around on one foot alone for long.  So the second foot of rapid growth of productive sectors so that quality jobs, in accordance with the expectations of the educated young generations are created in Kerala is important.  The industrial growth based on labour intensive traditional industries or energy intensive, chemical industries, upon which Kerala has been dependent so far, have reached a dead end.  Kerala needs to urgently shift to new sunrise sectors such as knowledge industries, service industries and skill based industries and so on which are more appropriate to its resource endowments. This transition cannot be achieved without attracting private capital in a large way into these sectors.  For this purpose, the Left government cannot agree to renounce the labour laws, dilute environmental laws or abolish land utilisation laws. The present budgetary situation does not permit us to provide any competitive tax concessions also.  So why should any capital come to Kerala?  It is for this purpose we are attempting to build world class infrastructure in connectivity and industrial common facilities. And also a major up-gradation of our social infrastructure in education and health care is in order.  The budget of 2016-17 provides a remarkable investment plan from this perspective. 

We have announced a package of Rs 20,000 crores during the current year.  Over the next five years, the ambition is to raise public led investment to around Rs 1,00,000 crore.  Such a step-up of investment has also become imperative given the signs of significant deceleration in the regional economy, due to crash of prices of commercial crops and crises in the gulf countries.  It is for these reasons that we have called the current year’s investment package of Rs 20,000 crores as Anti-Recession Package.

Given the fiscal crises of the state and the three percent limit for public borrowing imposed by the FRBM Act, how are we going to raise the capital for public investment?   The answer lies in systematising and expanding the present practice of centre and state governments to set up special purpose vehicles to mobilise resources and implement major infrastructure projects.  For this purpose we are setting up Kerala Infrastructure Investment Fund Board (KIIFB) which would borrow funds from the markets through a variety of instruments and make it available for investment. Statutory measures have also been adopted to ensure secured income flow from the budget to KIIFB and at the same time to ensure that no part of the resources raised are utilised for current expenditure of the government.  It is indeed a novel experiment but one which would have a qualitative impact on the nature of Kerala economy.