Credit wars escalate as polls approach

A ‘boycott row’ by Kerala’s Left Democratic Front (LDF) government overshadowed Prime Minister Narendra Modi’s visit to the poll-bound southern State this month. For the political pundit and the general observer alike, it marked the latest episode among the long-running confrontations between Kerala Chief Minister Pinarayi Vijayan and the Bharatiya Janata Party (BJP)-led Union government over Centre-State relations and fiscal federalism.

The Communist Party of India (Marxist) (CPI(M)) and the LDF sought to depict the exclusion of Kerala Public Works Minister Mohammed Riyas from the inauguration ceremony of two National Highways (NH) reaches as yet another attempt by the BJP to monopolise the spotlight and claim credit for development projects in the run-up to the Assembly elections. The Prime Minister was in Kochi on March 11 to inaugurate a clutch of high-profile projects, which included the two stretches of NH-66, the main north-south artery.

Miffed over the fact that Mr. Riyas was not invited, Chief Minister Pinarayi Vijayan and the Ministers for Local Self Government and Electricity, M.B. Rajesh and K. Krishnankutty respectively, also gave the event a miss. In battle-mode, the CPI(M) organised a parallel inauguration of the two highway stretches — Thalappady-Chengala and Vengalam-Ramanattukara — with Mr. Riyas taking centre-stage. A furious Mr. Riyas pointed out that while he, the State’s Public Works Minister, was kept out, the Union government had thought it fit to extend an invitation to Rajeev Chandrasekhar, the State president of the BJP.

Mr. Riyas and the CPI(M) stated that had it not been for the LDF government, NH development in Kerala would have been a distant dream. 

Price for a road

At the core of the State government’s grievance lies the fact that Kerala, in an unprecedented step, had decided to bear 25% of the land acquisition cost for the widening of the NH. According to the LDF government, the National Highway Authority of India (NHAI) had withdrawn from the project in 2014, citing a delay in the acquisition of the necessary land. The project was revived after the first LDF government led by Mr. Vijayan, which came to power in 2016, agreed to bear 25% of the land acquisition cost. Kerala had paid ₹5,580.74 crore, making it the first State to do so. Kerala had sourced the amount through the Kerala Infrastructure Investment Fund Board (KIIFB), a special purpose vehicle that mobilises resources for large infrastructure projects. Mr. Riyas also recalled instances where the Union Minister for Road Transport and Highways Nitin Gadkari had praised Mr. Vijayan’s government for having sped up the acquisition of land. Interestingly, Mr. Gadkari was also absent from the event.

Road development has been a perennially contentious issue in Kerala given its large population, geographical peculiarities and high demand for land. To be fair, the higher compensation payouts enabled by the Centre’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, has also had a hand in the revival of NH development in Kerala. 

The debt problem

Beyond the political sabre-rattling, the latest row spun the spotlight back on a related issue: Kerala’s objections against the restrictions imposed by the Union government on its borrowing ability, citing off-budget borrowings by the KIIFB and the Kerala Social Security Pension Ltd.

The State has repeatedly urged the Centre to expand its borrowing space by a sum equivalent to its NH spending. It was not that long ago when NH development was caught in the midst of a Centre-State blame-game in Kerala after parts of the newly-constructed highway collapsed, raising questions about quality. Also, this is not the first time where ‘credit’ for large undertakings or schemes has become a bone of contention. For instance, the Centre’s insistence that houses constructed under Kerala’s LIFE Mission housing project must display the Pradhan Mantri Awas Yojana logo had drawn sharp responses from Mr. Vijayan’s government. It is to be expected that ‘credit wars’ would again take centre-stage with Kerala moving into election mode. But while governments come and go, all that matters, ultimately, is whether taxpayers’ money is being spent wisely.