Speaking of economy

KOCHI: Kerala economy is in a deep financial crisis and this mess didn’t come about overnight. It is not just the result of years of mismanagement of our finances and the economy, but also a result of lopsided policies, which continued under various governments—be it the CPM-led LDF or the Congress-led UDF.

It is in this context that two recently released books on Kerala economy— ‘Kerala dhanakaryam: Janapakshathu ninnu oru punar vayana (Kerala finance -- a rereading from a people’s point of view) and ‘Samooham, Sambadhvyvashtha, Dhanakarayam (Society, Economy and Finance) by Jose Sebastian, economist and former faculty at Gulati Institute of Finance and Taxation, become relevant. The books are a must-read not only for the students of Kerala economy but also for laypersons, who are trying to understand how the state reached this unenviable position and what could be the possible way out.

‘Kerala dhanakaryam’, in fact, is an eye-opener in more ways than one, and it should hopefully read by the policymakers while framing or tweaking the current set of rules. Jose Sebastian, all through the book, brings out the anomalies in the policies in various segments where the rich get to enjoy an overwhelming share of the government subsidies. Let’s look at medical education, for instance.  

While the state spends as much as `5 lakh for a student in government medical colleges, only `30,000 is collected from the student as her fees.  If the government received only 5.65 per cent of its expense as fees in the medical education in 1972-73, it has come down even further to 1.35 per cent in 2017-18.

Now, who gets qualified in the highly subsidized medical education sector? Nearly 23 per cent of the students who get enter these government medical colleges are children of government employees, another nearly 12 per cent are from business families, 6.14 per cent are children of doctors, 3.16 per cent kids’ parents are engineers, 2.51 per cent students’ parents are college teachers, 8.44 per cent are children of school teachers. Only a meagre 2.26 per cent are children of daily wagers or small traders. More importantly, 47.83 per cent students who qualify at the government medical colleges are coming via CBSE or ICSE syllabus.

The book also exposes Kerala economy’s excessive reliance on three segments for resource mobilisation. The author has proposed several suggestions to increase the revenue even while banning lottery sales in a phased manner. The suggestions include a hike in building taxes, electricity tariffs, an increase in health and education fees, among others.

The second book is a collection of Jose Sebastian’s articles on economy published in the Mathrubhumi daily from 2010 to 2016. As prof M A Ommen writes in his foreword: ‘It may be difficult for everyone to agree with the solutions proposed by Jose Sebastian, but this book will definitely make everyone, who are concerned about the state of Kerala economy, to think deeply and review their own stance and positions on various aspects of the economy.”