NITI Aayog Delhi

Honourable Prime Minister, respected Vice Chairman NITI Aayog, and fellow Chief Ministers, Ministers, senior officials and friends.

It is with immense happiness that I attend the meeting of NITI Aayog, which provides a platform on which the Centre and the States can exchange views on matters relating to both.

However, I do remember that the erstwhile Planning Commission which dealt with the issues of the states was really a forum for consultation, which to a certain extent stood apart with some sort of a true federal spirit. Let me take the liberty to not mince words in telling you that the NITI Aayog is in no way a real substitute for the erstwhile Planning Commission. It is rather unfortunate that the forum of polemics and debate gets shrunk day by day. Earlier we had fora like the National Development Council, Inter State Council etc. All these have almost become defunct now. The only forum left for raising the issues of the State is this one. That is why I said that I am happy to get associated with this, at the outset.

Let me make use of this occasion to tell the Union Government that it should take the States too in to confidence, while signing international agreements which have a direct bearing on them. What I have to suggest is that there should be discussion in both houses of Parliament, before signing international agreements which may have impacts on the States.

This is the first meeting after the 12th Plan Period that ended last month and we are presented a view into the future with a fifteen year vision, seven year strategy and a three year action plan. The twelve five year plans had transformed the nation in the last sixty years from a food deficit to a food surplus nation, though there are millions of families going to bed daily with only half filled stomachs. We as a nation have made major strides in all spheres of the economy yet the poverty level is still alarming and poses a major challenge.

Every Five year plan had served as an aspirational blue print into the medium term future and the medium appraisals gave the required corrections to remain on course. In the transition from such aspiration in the past to the present vision for the future, we must remind ourselves that gains in the past came from sacrifices that citizens were asked to make and therefore the future gains must be equally shared by all and ensure that no one is left behind as the nation transforms.

While we appreciate the proposed new vision and strategy, we in Kerala continue to aspire to build an equal opportunity society with inclusiveness in spheres of decision making through a decentralised planning process that gets aggregated to the state plan. Factoring in the gains made in the last 12 five year plans, Kerala is continuing with the planning process and has initiated the 13th five year plan from the 1st of April 2017.

Kerala’s economy has a significant degree of dependence on exports of agricultural and other primary commodities. However the prices and market prospects are determined by fluctuations in the global economy. The growth of Kerala’s services sector is crucially dependent on earnings from international tourism and the flow of remittances from non-resident Keralites. It is correlated with the performance of the international economy in general and the economies of the Gulf region in particular.

A fundamental constraint on planned development at the State level is that of shrinking fiscal space. The structure of fiscal federalism in India is greatly tilted in favour of the Centre. The liberalisation regime has exacerbated the imbalance in the Indian fiscal system. This imbalance is manifested in the mechanism by which resources are shared between the Centre and the States as well as in the decreasing space for borrowing allowed to the State Governments.

The Thirteenth Five-Year Plan of the State will attempt to regain momentum in the economic growth of the State by more than doubling its Plan size over five years. The strategy for the Thirteenth Plan as a whole will include: Building a new Kerala through the four Missions that emphasise sustainable development and people’s participation in the following fields: high-quality school education; people-friendly health facilities; nature-friendly (including organic) agriculture; waste management, a clean environment, and a litter-free Kerala; clean water bodies and enhanced water resources; and secure housing and livelihoods. The strategy includes increasing material production in agriculture and industry; generating employment, skill development, livelihood security, and entrepreneurship; strengthening Kerala’s physical and social infrastructure; extending social protection and the struggle against social exclusion.

Our tasks and efforts for the next 15 years will be to build on the legacy of our State particularly in the areas of education, health, social and gender justice, and people’s participation in Government.

In the next 15 years, our task is to ensure sustainable, environment-friendly economic growth, and high levels of skill development and decent employment. We will ensure that its environment is cleaned and its biodiversity preserved. We will rejuvenate our water bodies. We will dedicate our curative and preventive health systems to the service of the broadest mass of our people. We will make the facilities and infrastructure in our public schools second to none. We will ensure that every family in our State is housed in comfortable, safe, and dignified homes. We would defend the historical gains of the toiling people, and strive to build a secular, democratic and prosperous atmosphere that ensures social and economic development.

Our fifteen year vision is to build up through a people centric development planning process a prosperous, dynamic, knowledge-driven, competitive and eco-efficient economy with innovation, tolerance and diversity that will transform the State into a “Sustainable Economic Prosperity area” within the Country.

Our aim is to achieve a compound rate of 7.5% in real terms during the next 15 years while increasing the share of education and health sectors in GSDP so as to provide quality education and health security for all. This, we believe will usher in a just and equal society in a clean and safe environment. We would invest in quality infrastructure to nurture and sustain value added tourism and biotechnology, information technology and cutting edge medical sciences. Kerala has already achieved most of the Millennium Development Goals and has created sound policy frameworks based on pro-poor and gender sensitive development strategies to improved nutrition and sustainable agriculture to ensure clean potable water, soil and food for every citizen. Some of the policy objectives include enhancing natural soil fertility and productivity ensuring soil and water conservation, ensuring agricultural bio-security and food and nutritional security.

Our approach is to ensure healthy lives and promote well- being for all at all ages. We have set targets of 12 for Maternal Mortality Ratio and 6 for Infant Mortality Ratio by 2030.

Kerala is in the forefront of ensuring complete free and equitable primary, secondary and tertiary education to all. Gender parity in education has already been achieved. General enrolment of Scheduled Castes/Tribes is comparable to that of the general population. Relevant skills are being imparted and lifelong learning schemes like Additional Skill Development Programme (ASAP) developed in Kerala has been accepted as a model for replication elsewhere in India. Kerala has ensured 50% reservation for women in local governments and ensures women’s full and effective participation and provides them with equal opportunities for leadership at all levels of decision –making in political, economic and public life.

Kerala has already achieved 100% sanitation. As 60% of the population depends on wells for drinking water, location specific approach for water security and management has been initiated. Upholding our commitment to ensure access to affordable, reliable, sustainable and modern energy for all, we are already working towards 100% electrification of our households and diversification of our energy sources.

Our approach is to build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation, making smart, compact, clean and green cities and human settlements inclusive, safe resilient and sustainable.

Our strategy is to protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, preventing bio-diversity loss and preserving the natural wealth of Kerala for its future generations.

I would like to point out that there is a general narrative being repeated in the public domain that post 14th Finance Commission award, states have been given larger resource transfers and therefore Central Assistance to states must be limited to specific sectoral interventions. In my view, it is a fallacy. States are at various stages of development and require support, both financial and technical, for a considerable period of time to improve their quality of life, infrastructure, job creation and social security.

I would like bring to the kind attention of The Hon’ble Prime Minister a few major issues that require higher level intervention and are linked to Kerala’s Five year Plan.

1. State Government has undertaken a Total Housing Mission – LIFE (Livelihood, Inclusion and Financial Empowerment), to wipe out homelessness, improve the quality of life by providing houses and allied facilities to the landless and homeless. The State Government would like to achieve the target by converging all central and state housing schemes in the next five years. Therefore I would urge the Hon’ble Prime Minister to direct the concerned for making larger allocation by frontloading of central assistance during the next three years. Thereafter, there will be no further need for central allocation under PMAY (Gramin) to the State.

2. The State has also embarked on an ambitious programme for creation of smart schools and upgrading the schools to international standards through mobilisation of funds from various sources. Central Government may make the central assistance available to the State by front loading.
3. Under the Haritha ( Green) Keralam Mission the State would promote nature-friendly (including organic) agriculture; scientific waste management, bring about a clean environment, and a litter-free Kerala and repair, rehabilitate and rejuvenate water bodies, rivers, tanks and ponds. Central Assistance is required for rejuvenation of Bharata puzha, Periyar and Pamba rivers.

4. As per the direction of the Ministry of Health &Family Welfare, State Government had identified sites for establishing a medical institute equivalent to AIMS in the state. In the beginning of this year the State had informed the Ministry that 200 acres of land in Kozhikode District has been identified but no action has been taken so far by the Ministry of Health and Family Welfare.

5. Though the State has made significant progress in primary health care, we have drawn up an ambitious programme under Ardram Mission to strengthen public health sector and re-structure the public health infrastructure in secondary and tertiary levels to create a patient-friendly system for delivering quality services. Substantial state resources would be provided during the 13th plan period and I would urge the Central Government to enhance the central assistance to supplement the efforts of the state in fulfilling its objectives within the five year period.

6. State Government plans to implement K-FON, an overhead fibre optic network using the right of way available with the state power utility. This core backbone will enable local cable TV operators and Telecoms to extend fibre connectivity to every home upholding the principle of Right to Internet. All the government institutions will be interconnected. This network will be leveraged to provide Gigabyte level bandwidth throughout the state. Government will provide free internet connection to 20 lakh BPL families and the entire project will be completed in eighteen months. I would urge the central government to release the required amount and to extend every.

7 Kerala and Tamilnadu had taken up the issue of extending Chennai- Bengaluru Industrial Corridor to Kochi via Coimbatore and the Southern Zonal Council considered the matter favourably in view of the industrial potential of the area. Kerala State Industrial Development Corporation has appointed a consultant to prepare a perspective plan and a concept Master Plan for the proposed corridor. I would urge the Hon’ble Prime Minister to kindly direct the concerned agencies for early approval.

8. Hon’ble Union Minister of Chemicals and Fertilizers has already announced that, Kerala is being considered for setting up one of the six Pharma Parks to be established in the country. I appreciate this kind gesture. The State will provide a favourable eco-system for the industry. The process of setting up of the park needs to be expedited.

9. With the substantial expansion undertaken by Bharat Petroleum Corporation Limited (BPCL) in its Kochi Refinery, petrochemical base products like Propylene and Ethylene are becoming available in the location. The State Government intends to promote a Petrochemical Park on 600 acres of land to be procured from FACT through negotiations. A sum of Rs.1264 crores is earmarked for this under KIIFB.

10. State Government intends to establish a large Laboratory-cum-Study Centre with international standards for the scientific development of Ayurveda based on evidence, standardization of drugs and research linking Ayurveda with modern bio technology and locate the Institute named International Research Institute in Ayurveda at Kannur. The project has been presented to Government of India for funding. I would urge for early approval.

11. Given its location, the new airport under construction at Kannur has the potential to become a regional hub and a centre that would provide logistics base for the maintenance, repair and overhaul (MRO) facility for the airline industry. Union Ministry may consider providing necessary support in facilitating the establishment of the hub and the logistics base.

Finally, may I point out that the newly introduced GST clearly trespasses into the jurisdiction of the States and infringes on the rights the States had been enjoying. The right of the States to tax on the goods that go out of the State and the items that come in, has been totally lost. Against the backdrop of the advent of this mechanism, State is not in a position to protect the genuine interests of the farmers and small traders. We have been told that whatever loss the States will have to suffer with the introduction of GST will be made up by the Centre over a period of five years. I urge upon the Central Government to evolve a viable mechanism that ensures the compensation that will be due in the coming years.

Cooperative Federalism must not remain as fine prints in statements and documents but remain alive and vibrant in centre-state relations. In this endeavour, Union Government must structure its development priorities to facilitate the realisation of the States’ vision so that collectively all States transform their visions complimenting each other in the true spirit of co-operative federalism to ensure the transition of the national economy into world’s third largest inclusive and competitive economy by 2032.

Let me conclude by saying that if we have to realise the 15 year vision, now is the time to have a structured mechanism for regular consultation and constant interaction among the chief ministers for outlining, discussing and strategising the goals, objectives and direction for the national economy. It should be a forum where fiscal matters, state specific matters and other issues of sensitive nature, can be discussed and deliberated upon and resolved. It can set out the important national priorities through negotiation, consultation and consensus building where all stakeholders will have every right to participation. Collective and cooperative action is crucial for responding to challenges – such as globalisation, environmental sustainability and Poverty.

Thank You.