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How Left in Kerala is invoking both Marx and market to keep power in this election

Infra funding agency KIIFB has been raising money to finance 457 projects, like schools and hospitals, worth Rs 63,249 crore. But the central govt has accused it of corruption.

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Thiruvananthapuram: The roads in Kerala are smoother than Hema Malini’s cheeks, students in private schools in the state are joining government schools in droves and the construction of government hospitals rivalling private healthcare centres has begun in 73 out of the state’s 77 talukas.

As Kerala goes to the polls on 6 April, the Left Democratic Front (LDF) hopes to break the alternating pattern of power between it and the Congress-led United Democratic Front (UDF) that has been the state’s wont since 1982.

The government is relying on its development finance institution, the Kerala Infrastructure Investment Fund Board (KIIFB), which has led the state’s progress over the last five years. But the infra funding agency has got entangled in accusations of corruption on the eve of the polls.

In March, Finance Minister Nirmala Sitharaman, speaking at a function organised by the Kerala BJP, accused the LDF government’s KIIFB of corruption.

Soon, Enforcement Directorate officials came knocking on the door of KIIFB’s senior management, accusing them of violating Foreign Exchange Management Act rules by issuing masala bonds on the London Stock Exchange in May 2019.

“What is this organisation? We also make a Budget in the Union government. We don’t give all money to one particular agency… the CAG has commented and criticised… total questionable operation. If this is budget-making, no wonder Kerala is going into a debt trap,” Sitharaman said.

But the FM’s angst seems to have become a feather in the cap of state Finance Minister Thomas Isaac, who has led KIIFB over the last five years, raising money from the domestic and international market to finance 457 projects worth Rs 63,249 crore, according to government data.

These include a 10-storey modern hospital in the Punalur taluka, expansion of roads, water supply schemes, electricity sub-stations and even a zoo in Thrissur.


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Schools to hospitals — how KIIF-B is using funds

The expansion of the Cotton Hill Girls School in Thiruvananthapuram, whose motto is never to turn any parent away, was carried out with KIIFB funds.

“We believe it is the right of the student to study. So, if we have more than 35-40 girls in one section, we just add another section,” Ameena Roshni, a teacher at the Cotton Hill school, told ThePrint.

Students at Cotton Hill government girls school in Thiruvananthapuram, which has been refurbished with KIIFB funds. Photo: Jyoti Malhotra/ThePrint
Students at Cotton Hill government girls school in Thiruvananthapuram, which has been refurbished with KIIFB funds. Photo: Jyoti Malhotra/ThePrint

Several students who had come to school to clear exam doubts they weren’t able to resolve online, told this reporter that their parents worked a variety of jobs — as tailor, teacher, electrician, in a provision store, private business as well as in the IT sector.

The students said they sometimes felt a stab of nostalgia for the school’s quaint old red-tiled roof of the school which last year gave way to a four-storey “high-tech” building. Meaning, along with English, Hindi and Malayalam, IT classes are compulsory and the new computer labs have several computers to go around.

Along with Cotton Hill, KIIFB has also funded 45,000 high-tech classrooms across the state costing Rs 493 crore and 11,000 high-tech labs in all government-aided schools at a cost of Rs 292 crore, showed the government data.

In the Punalur taluka, 70 km from Thiruvananthapuram, round the corner from the Raj-era hanging bridge, a showpiece 10-storey hospital worth Rs 66 crore has come up — complete with 370 beds, seven operation theatres, artificially intelligent scanners at the entrance, which will ban visitors who are not masked up, and even a children’s play area.

Hospital superintendent Dr Shahirsha explained that because of Punalur’s proximity to the Tamil Nadu border, it receives as many as 3,000 OPD patients and 15,000 visitors every day.

Hospital superintendent Dr Shahirsha stands in the play area of the new government hospital in Punalur taluka, built with KIIFB funds. | Photo: Jyoti Malhotra/ThePrint
Hospital superintendent Dr Shahirsha stands in the play area of the new government hospital in Punalur taluka, built with KIIFB funds. | Photo: Jyoti Malhotra/ThePrint

The government, he said, didn’t just meet the hospital’s hardware needs. “We are the first government hospital in the state to introduce ‘birth companionship’, which means that the husband is present when his wife is giving birth. Within half an hour of my application to the health secretary, permission for this was granted,” Dr Shahirsha told ThePrint.


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What the role of KIIFB is

Certainly, KIIFB’s presence is everywhere. Last year’s masala bonds, issued by a Communist government, which has traditionally shied away from capitalist activities, was a high point in the LDF’s ability to adapt to market conditions.

A member of the ruling Communist Party of India (Marxist)’s politburo, the party’s highest decision-making body, said on condition of anonymity, “Marx was never against change. He didn’t believe that Communists should be doctrinaire, he wanted them to engage in dialectics, which means an analysis of the real world.”

These real-world conditions clearly tell the government what to do, explained Thomas Isaac in an interview to ThePrint.

For the poor, who constitute about 30 per cent of the state’s population, it was imperative to create a safety net. So the state is providing a monthly pension of Rs 1,600 to old people and single women; during Covid, every family duly got its rations monthly, which popularly came to be known as the “food kit”.

Meanwhile, Isaac said, to cater to the growing expectations of Kerala’s growing middle-class, which had participated in the Gulf boom of the last few decades, it was necessary to expand the state’s delivery mechanisms, especially in health, education and physical infrastructure.

Enter KIIFB.

Messaging to different parts of the population was the key, Isaac added.

The realisation that new solutions were necessary came soon after the ruling front was elected in 2016. The government needed resources to fulfill the promises it had made to its voters.

Chief Minister Pinarayi Vijayan, known for his ideological purity, relented when he saw that resources raised by Isaac’s market-friendly policies were being used to improve the lives of citizens.

KIIFB, which had been created in 1999 during the previous LDF government, was reactivated to do exactly that. It has never looked back.

Just before the model code of conduct came into being in February, KIIFB’s approval of Rs 63,249 crore financing for infrastructure, included Rs 20,000 crore for acquiring land over the last five years, state officials told ThePrint.

Even Centre is taking a cue

Notwithstanding Sitharaman’s criticism of KIIFB on the eve of state elections, the Centre has actually taken a leaf out of the agency’s book.

In her Budget speech, Sitharaman announced that the Centre would soon set up a Rs 20,000-crore development finance institution to raise Rs 111 lakh crore to do precisely the same thing — to fund development projects.

Certainly, there’s no free lunch — the new Punalur taluka hospital, for instance, knows it must raise about Rs 20 lakh every month to maintain itself. So visitors will be charged for Rs 5 for every visit and patients Rs 50 for a chest x-ray. Dr Shahirsha believes it will be enough.

As Kerala goes to the polls, KIIFB has clearly become the Left Front’s most important instrument for economic and social change.

Apart from Sitharaman, opposition leaders like Ramesh Chennithala of the Congress, who had once railed against the “unconstitutionality” of KIIFB’s foreign borrowings, have moved on to other issues — the BJP to “love jihad” and the Congress to fighting the fight of their political lives. The latter knows that if it doesn’t do well in these elections its very survival is threatened.

Perhaps the biggest change KIIFB has wrought is upon the Left itself. Leveraging the market to pay for its government’s projects has introduced not just fiscal discipline, it has loosened party control on the smallest decisions.

In many ways, that has forced party comrades to have better conversations with the people on the transition to a welfare state. Marx, they say, would have approved.


Also read: Trip to the moon, rolling beedis, washing clothes — TN & Kerala show new ways to woo voters


 

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2 COMMENTS

  1. I don’t think markets in kerala are loss centers. Kerala has a good purchase and enough enterprises running smoothly. Then what about lakh crores of money spent on single bullet train project. 40,000 crore on polavaram etc. Which has nearly stopped working. Kerala projects are in comparison much more viable supposedly.

  2. I don’t understand what the point of this article is. Raising funds overseas to fund projects is nothing new, and this is a straightforward debt trap, since they’re using overseas borrowing to fund more loss centers, none of these assets can generate sufficient funds to service these massive loans, unless they plan to deviate from their aim of welfare and low costs.

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