Tackling debt, job drought | Kerala's V.D. Satheesan

The decision came in pretty late, but it had the stamp of public approval. Ten days after the Congress-led United Democratic Front (UDF) won a resounding victory in the Kerala assembly election, winning 102 of the 140 seats, the Congress high command finally announced leader of the Opposition (LoP) in the outgoing assembly, V.D Satheesan, 61, as the state’s new chief minister on May 14. He was chosen over two other party veterans—AICC general secretary and Alappuzha MP K.C. Venugopal, a strong contender who reportedly had the backing of a majority of the newly-elected MLAs; and former state home minister and Haripad MLA, Ramesh Chennithala. Satheesan is expected to take oath as CM on May 18.

Amidst the intense lobbying for the post, Satheesan had the backing of only former Kerala Pradesh Congress Committee chiefs V.M. Sudheeran and K. Muraleedharan as the party brass sweated over the CM aspirants’ list. The crucial factors in his favour—the UDF alliance partners, including the Indian Union Muslim League (IUML) with 22 seats, who were rooting for him, and the public sentiment back in Kerala. As the deliberations dragged on, support for Satheesan seemed to swell, as also a general feeling that he was being wronged by the ‘Delhi cabal’. ‘Warning’ notices against the Gandhis in Wayanad, people on the street haranguing newly elected Congress MLAs perceived to be favouring Venugopal, impromptu protest marches by partymen in some cities, made it increasingly evident that the five-time MLA from Paravur near Kochi was, as at least two newspapers put it, the ‘people’s choice’.

There was good reason for it too. Satheesan had been the face of the Opposition since he took over as LoP in 2021 when the state Congress was at its lowest ebb after the bruising defeat to the Left Front. He led the fightback both inside and outside the assembly, taking on the Pinarayi Vijayan government on a range of issues. Meanwhile, what may have also tipped the scales in his favour with the high command is the thought that a grassroots leader as the CM face augurs well for the Congress in Kerala, at a time when both Rahul Gandhi and Priyanka Gandhi had registered big wins from Wayanad in north Kerala and will need to face voters again.

CHOPPY POLITICAL WATERS

The next few weeks will be quite a challenge for Satheesan, especially with cabinet formation and allocation of ministries. Apart from the various factions among the Congress MLAs (a majority of whom were given tickets by Venugopal, and hence backed him initially), there will be the allies to consider. The IUML had been talking of a deputy CM post in the run-up to the election, but seems to have put it on the backburner since then. Satheesan will also have to deal with a sulking Chennithala, who has publicly declared that he would not be joining the government in any capacity.

The UDF had stormed to power raising key issues regarding the state’s development. Other than its own pre-poll promises, there are also the issues the party had taken up, such as enhanced monthly honorariums for the protesting ASHA workers, clearing the pension dues and salaries of the Kerala State Road Transport Corporation (KSRTC) workers, and others.

On the social front, Satheesan will have to balance the demands of the various religious and caste groups. Any slip-ups and he will play into the hands of an increasingly aggressive BJP, which has for the first time won three assembly seats this election. One of the things the new CM has going for him is his strong secular credentials. Before the election, Satheesan had taken on the top leadership of the Nair Service Society (NSS) and the Sree Narayana Dharma Paripalana Yogam (SNDP) of the Ezhava community for vitiating the air with their anti-Muslim comments. It was a calculated risk, since Pinarayi and the Left’s perceived ‘soft Hindutva’ moves were becoming a point of discussion. In the event, it cost the Left dearly, while Satheesan emerged as the winner, with a more clearly articulated line against polarising politics. The new chief minister maintains that communal forces, whether organised or unorganised, will not have a say in the affairs of his government, even as one of his key allies is the IUML.

FIXING THE FINANCES

The new government faces multiple challenges in managing the finances, with a drained exchequer. Kerala’s debt-to-Gross State Domestic Product (GSDP) ratio is around 24.8 per cent. The revenue deficit is at 2.49 per cent of the GSDP, estimated at Rs 14.3 lakh crore. There are three reasons for the steady increase of the revenue deficit over the years—reduced central allocation, inability of the state to raise more domestic revenue other than the liquor and lottery tax, and some 70 per cent of state revenue being earmarked for salaries, pensions and social security welfare sops. As of today, Kerala’s debt amounts to some Rs 4.8 lakh crore.

Other than pending bills, the new government has to find money for its poll promises, which included, among other things, free travel for women in public transport, Rs 1,000 monthly dole to girl students doing graduate and PG courses, and Rs 25 lakh medical insurance for every family.

The Centre has approved a borrowing limit of Rs 23,000 crore till December this year, but it will come as little relief for the new government. Any leeway in the fiscal realm will also depend on how well Satheesan manages the state’s relationship with the BJP-led Centre. This is also critical for the many ongoing infrastructure projects, since Kerala will be dependent on the Narendra Modi government for funds. Incidentally, monies will also have to be allocated for the pending bills and repayment of the Kerala Infrastructure Investment Fund Board (KIIFB) loans, which currently amount to around Rs 3,300 crore annually.

The new CM will also do well to avoid the pitfalls that led to the demise of the Pinarayi government. Despite enlarging social security pensions and providing some 500,000 free homes for the poor, instances of political corruption and mismanagement of public funds did the LDF in. As retired technocrat Shajen Raphael explained to india today, political parties need to understand the emerging dynamics in Kerala. It’s not the free sops that will win them elections, but their vision for a future Kerala and clean and transparent governance. “After a decade in power, the Left leaders forgot the basic ethics of talking and communicating to the people,” he says.

In effect, it will not be smooth sailing for the Satheesan government. The government will have to find new revenue resources and also money for existing welfare schemes. As one senior retired bureaucrat put it, “The Congress announced sops for voters without realising its impact on Kerala’s revenues. They will soon find out that winning the election and governing the state hold very different challenges.” It looks like Satheesan has his task cut out for the next five years.