I t is not an uncommon practice to provide brief highlights of the budget to journalists during the budget speech or minutes earlier.
These are considered ‘embargoed’ news in journalistic parlance, which means there is an official ban on their publication/broadcast till the speech is over. Kerala Finance Minister T M Thomas Isaac was at the receiving end of Opposition fury last week when some scribes breached the gentleman’s agreement on the embargoed budget highlights.
The leaked document invariably found its way to the hands of the Opposition leader, triggering a commotion while the budget presentation was going on.
Getting back to the budget, it had a number of initiatives, some laudable, like autism parks, and some unnecessary, like free internet to 20 lakh families using K-fon, a fibre optic network with a `1,000 crore capital investment mark-up.
If the budget’s soft face was the welfare state makeover, its other side was the thrust on infrastructure. The catch: All major projects had an off-budget entity, the Kerala Infrastructure Investment Fund Board (KIIFB), as the funding source. KIIFB would initiate projects worth `15,000 crore in 2015-16, and another set of construction works worth `20,000 crore in 2017-18.
The strategy to use an off-budget body is simple. As nearly 80 per cent of its revenue is spent on salaries and pensions, the government has little elbow space to borrow given its big revenue deficit. The plan is to tap investors through bonds or other debt instruments offered by KIIFB to fund the projects.
But such fundraising comes with the government as guarantor. Isaac, an economist of repute, is banking on completion of highways and bridges to boost the economy, which, in turn, would fill up State coffers.
However, the government will have to start repaying the bond investors long before the projects yield returns, as skewed a yield-to-maturity model as one can expect. Surely, these are the points to debate and not why an embargoed release got ‘leaked’.