Cutting non-plan expenditure can solve fiscal crisis’

There is an urgent need to turn around Kerala’s loss-making Public Sector Undertakings by strengthening them with a qualified board of directors and through hard budget restrictions. Public-private partnership could be a way forward, former Chief Secretary Paul Antony has said.

He citied Kerala’s public distribution system as one of the earliest and the best example for the same, in his keynote address at a two-day roundtable curated around the theme “Rebuilding the Kerala Economy: Time for a paradigm shift?” that concluded here on Saturday. “Kerala needs to outlive the old rhetoric and get realistic about its economic priorities. Instead of creating new government jobs, Kerala can foster an ecosystem to generate more jobs in the private sector. The ‘hyper active’ local-governance machinery must be empowered to move beyond regulation, to create and sustain industries and jobs,” Mr. Paul said.

Mohammed Hanish, managing director of KMRL, opined that PSUs cannot be done away with in the social sector. “To solve the fiscal crisis in Kerala, there is a need to curtail non-plan expenditure by controlling salaries, pensions, interest payments and unnecessary administrative expenses”, said B.A. Prakash, Chairman, Fifth State Finance Commission-Kerala, while answering questions on the deteriorating fiscal health of the State.

The roundtable was organised by the city-based Centre for Public Policy Research and Institute for New Economic Thinking (INET), a New York-based non-profit organisation.

*This news story can be also read at The Hindu’s website.