Thomas Isaac budget: Split between populism and Marxist rationalism – Times of India

Tapping into capital markets to fund infra projects is a smart move but shouldn't finance minister Dr Thomas Isaac have also used the Kerala budget he presented on Friday to bring down revenue expenditure? Is he split between mai-baap populism and Marxist rationalism, has the politician in him trumped the trained economist that he is?

The crucial and contentious part of the Kerala budget presented by finance minister Thomas Isaac on Friday in the state assembly, which the LDF government has touted as an "alternative development" path, lay buried in the fine print. In 201718, the state will receive loans worth Rs 21,227.95 crore from various agencies, but 75.6% of this - i.e., Rs 16,043.14 crore -will have to be spent to bridge the state's revenue deficit. A state which has to spend threefourths of the loan amount, meant for capital expenditure, to address revenue deficit is certainly not in the pink of economic health. Rather, it may be moving to an inexorable debt trap.

Isaac justified this state of affairs by citing the stagnation that has arisen as a result of demonetisation and the corresponding need on the part of the state government to increase its budget expenses considerably. He even drew a parallel with his own 2008 budget which was announced at the time of global recession.

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Thomas Isaac budget: Split between populism and Marxist rationalism - Times of India