Kerala, the last surviving hotbed of Marxism and Communism in the country, has made a volte-face from its stance towards US-led capitalism and a liberal economy. With the state facing an unprecedented economic crisis, the Pinarayi Vijayan-led CPI(M) Government has thrown open its doors to foreign institutional investors (FIIs), global start-up companies, and foreign universities. Finance Minister K N Balagopalan, in his 150-minute-long speech, made it unambiguously clear that the CPI(M) is abandoning its ideology once and for all and accepting the Chinese ideology of welcoming capitalism in a big way.
“Rs 3 lakh crore of private investment in the next three years is what we are aiming for. The developed countries and foreign investors are expected to flock to Kerala because we have a chief minister who is as powerful as the Sun,” said Balagopalan.
What stood out in the budget proposal is the open invitation extended to foreign universities to set up campuses in Kerala. If everything goes well, universities like Harvard, Oxford, Cambridge, Leeds, and Birmingham (the alma maters of CPI(M)’s former secretary Prakash Karat and Pinarayi Vijayan’s son Vivek) would open their campuses in the State soon.
Interestingly, the CPI(M) cadre physically assaulted and tortured TP Srinivasan, former Ambassador and chairman of the Kerala Higher Education Council, in broad daylight for broaching such a proposal in 2015. Srinivasan, himself a college lecturer before switching to diplomacy, was seen on TV news channels being beaten up by cadres of the CPI(M).
The move to invite foreign universities to Kerala is seen as a fallout from the exodus of students from the state to Europe, the USA, and Australia for higher education. “More than 1,000 students leave Kerala’s shores on a daily basis in search of centers of excellence in other countries, and the chances of them coming back look bleak,” Father Alexander Koodarathil, director of the KM Cherian Institute of Medical Sciences, said at a public function recently.
What remains to be seen is whether foreign universities will be granted academic freedom to operate in the state. “They have their own selection procedures, and their qualifying standards are high. These universities do not adhere to the Indian style of reservation,” said Dr Achuthshankar R Nair, former head of the Department of Biomedicine and Bioinformatics at the University of Kerala.
The efforts of the Kerala Government to seek the cooperation of foreign investors in major infrastructure projects are likely to be futile. “No investor worth their salt would take up major infrastructure projects in Kerala because there is no guarantee or consistency in the government’s policies. Infrastructure projects have a long gestation period, and it would take years for investors to recoup their money,” said Rajmohan Pillai, chairman of Beta Group, a business conglomerate based in Kerala.
He pointed out how an industrialist like Sabu Jacob of the Kitex Group was driven away from the State by the Government.
The government has imposed a tax on companies with captive generation plants. For every unit of power generated in the state, the producer has to pay 15 paise to the exchequer. The court fee for filing cases related to property dealings has been increased to Rs 2 lakh from the current rate of Rs 50, making the judicial system in Kerala the most expensive in the country. The finance minister attributed the mismanagement of the state’s economy to the central government, although he did not elaborate further.
