Respected Deputy Chairman Planning Commission Shri Pantji, esteemed Members, Advisers, senior officials of the Commission and dear friends,

At the outset I would like to thank the Deputy Chairman for arranging this interface between the State Government and the Planning Commission which will enable us to share our perceptions and exchange our views on the development issues facing Kerala. Since the Planning Commission has an overview of the development scenario across States, I am sure we will profit from your advice and suggestions. At the same time, I hope to clarify issues and make our position clear, based on an intimate understanding of the development situation in the State.

Our Government took over at a time when the State was on the verge of financial breakdown. During the first year, we applied a lot of correctives some of them painful. During the second year, which happened to be the first year of the Tenth Five Year Plan, we focussed on nursing the State back to a relatively stable fiscal situation. Though much more remains to be done, I am happy to inform you that at the present moment there is reason for optimism.

Of course, we had to down size the Plan again last year. But preliminary estimates show that we have achieved an expenditure of around Rs.3500 crore which is 38 % above last year's achievement of Rs. 2531 crore. In consonance with your advice we have pegged our current year's Plan at a modest but realistic figure of Rs.4350 crore.

During 2002-03 we were successful in enhancing internal resource mobilisation. I am happy to inform you that the Sales Tax collection alone went up by around Rs.1000 crore to Rs. 5375 crore. The collection under National Savings was also stepped up from Rs.877 crores in 2001-02 to over Rs.1500 crores during 2002-03. The revenue deficit in the last year was Rs.1898.67 crore which is much below the previous year's level. The fiscal deficit has also come down by 13% during the last year.

In order to seize the advantage we have declared the current year as the 'Year of Development'. I solicit your full support to enable us to achieve our objective. This year our Plan has a unique package called Modernising Government Programme (MGP) for which we have set apart Rs.513.35 crores. These initiatives constitute the core of our reform agenda which aims at further enhancing Kerala's human development and enabling economic development and employment generation in an environment of good governance.

We have put new investment as the centerpiece of our development efforts. The Global Investors'Meet has contributed to changing the mind-set of the people and entrepreneurs regarding Kerala as an investment destination. My government has put in place a fast track mechanism to translate these investment proposals into reality.

Due to unstinted efforts we have been able to step up inflow of bilateral and multi-lateral aid to the State to Rs. 819 crore in 2002-03 from Rs. 97 crore in the last year of the Ninth Plan. We will soon be posing a project for strengthening local governments for which Kerala is certainly the most deserving candidate. May I seek your full support in getting the scheme approved?

After a decade of constitutional reforms to strengthen local governments, Kerala stands as the most successful model in the country. We are now in the process of institutionalising our decentralisation initiatives which were launched through a campaign earlier. At a time when the Government of India is planning to amend the Constitution I would request the Planning Commission to study Kerala's experience so that there is empirical evidence guiding the amendments.

Planning Commission has always been supportive of the Kudumbashree programme in Kerala. Now it has found place as one of the 20 best practices identified by the Planning Commission. Kudumbashree has under its fold 116798 NHGs covering 2330488 women below poverty line. It has generated employment for nearly 24,000 women by way of 1068 group micro enterprises and 13315 individual enterprises. These groups of poor women have mobilized savings of Rs. 184.25 crore as of now. Kudumbashree have now embarked on an interesting initiative to take comprehensive care of the destitute population. This is a model worth incorporating into the anti-poverty strategy of Government of India.

On the IT front we have launched 'Akshaya', a project to bridge the digital divide in Kerala. It aims at spreading computer literacy through essentially self-financing ventures by local entrepreneurs.

We have also launched certain critical reform initiatives across a number of sectors. These include :-

(1) Based on the recommendations of the Enterprise Reforms Committee proposals for restructuring, joint ventures, disinvestments etc., in respect of 12 PSUs are under final stages of consideration by Government. All the other PSUs are being subject to detailed examination for revival, joint venture etc.

(2) The State Electricity Regulatory Commission has been set up. Electricity Board has initiated action to bring down transmission loss and improve project execution efficiency. The progress is being monitored regularly.

(3) The Cabinet has approved a Reform Plan for the Kerala Water Authority which envisages the former playing the role more of a technical support agency and bulk provider of water to large schemes. As a first step 1050 single village piped water supply schemes will be transferred to Village Panchayats.

(4) A reform package has been formulated for the Kerala State Road Transport Corporation as well. Running loss has been reduced from Rs.15 crore to Rs.6 crore per month.

(5) An Infrastructure Bill is under the consideration of the Legislature which would promote private investment in the infrastructure development in the State.

(6) The Law Reforms Committee has given its first Report containing new initiatives and suggestions for repeal of 697 obsolete laws.

(7) All E-governance initiatives, several of them taken up using Special ACA are being made time bound and result-oriented with specific target dates and objectives.

During the last two years I had sought the help of the Planning Commission and received positive response most of the time. However some of the pending items of importance are:

i) Kerala gets only a measly allocation of Rs. 20 crore under the flagship programme for rural connectivity, that is, Prime Minister' Grameen Saddak Yojana, on the logic that every village in Kerala has been connected by a all-weather road forgetting the basic fact that a Village in Kerala has an average population of around 30,000 and it is the habitations which need connectivity. Kerala still has about 50% of habitations unconnected by all-weather roads.

ii) The Planning Commission may have a relook at the figures of poverty, particularly rural poverty, arrived at on the basis of NSS data. Till it is validated in a fair manner, the 1993 data may continue to be used for the various purposes.

iii) The Budget announcement to do away with assistance from small bilateral donors may be reviewed.

iv) While assessing the resources of the State, potential for growth of Small Savings has to be reckoned on the basis of the achievement in 2002-03. Kerala expects to mobilize Rs. 2200 crores during current year.

v) Kerala is making services efficient to improve the lot of its tribal population. A key initiative is to provide at least one acre of land to all landless tribal families for which degraded forest land, especially from the old private forests now vested in government, is absolutely necessary. The Planning Commission may independently assess this and support our request.

vi) The old demand to reduce the loan portion of central assistance is now of special urgency in the context of the prevailing fiscal situation. I reiterate my earlier request to make the grant and loan 50 : 50.

May I request the Deputy Chairman to personally follow up these requests?
Last year the Planning Commission was generous in sanctioning Special Additional Central Assistance for priority projects and I am glad to inform you that they have been put to innovative use. This year I am submitting proposals costing Rs.110 crore with focus on the following:
(1) Attacking poverty of the poorest of the poor like destitutes, disabled and the tribals.

(2) Improving critical infrastructure in the Capital City.

(3) Schemes in innovative areas like eco-friendly handloom cloth, medicinal plants and documentation of indigenous knowledge.
I request the Planning Commission to agree to this package of special projects.
I conclude with the confidence that our performance will substantially improve during the current year. May I seek your continued support and guidance?

Thank you,
JAI HIND