Kerala Budget 2019: When the going gets tough
January 26, 2019
Kerala Budget 2019:
When the going gets tough
This refers to Vinson Kurian’s report “A do-or-die situation for Kerala on fiscal front’ (The Hindu Business Line, January 26). “When the going gets tough, the tough gets going”. People of Kerala have proved that this is not just an old adage, but a real life situation while handling two different types of challenges during the second half of 2018. The August 2018 floods and the year end Sabarimala episode. Both could have destroyed the identity of the state but for the deft handling by the people of Kerala. But, when it comes to long term handling of resources and financial planning, Kerala has a long way to go. To get out of the present financial mess, the state will have to exploit its untapped resources in addition to augment the inflow of NRK (Non-Resident Keralites) funds by providing appropriate incentives/disincentives. Here is how:
1) Realign the average Malayalee’s attitude to gold and jewellery. For historic and cultural reasons south Indians and especially Keralites are habituated to accumulating gold and jewellery as part of family assets. By creating awareness about the advantages a part of this accumulation can be diverted to income-generating liquid gold deposits under various gold deposit schemes.
2) State could consider a ceiling for per-family gold holding and propose a disincentive tax for holdings above a threshold limit. Charitable and religious bodies also can be encouraged to deposit part of their gold stock with banks to earn income. If for any reason this is resisted, as a disincentive a nominal tax on holdings beyond a reasonably high threshold level could be considered. A proper accounting of domestic gold stock will have to precede all these efforts.
3) There should be disincentives for keeping built-up areas unoccupied and agricultural lands barren.
M G Warrier, Mumbai