It’s 7.30 am and there’s already a small crowd of people gathered at Cliff House, the official residence of KeralaChief Minister Oommen Chandy, in Thiruvananthapuram. Security is light and every person seeking entry is allowed inside the sprawling compound. They’re here to present petitions to Chandy who hears each one out individually and then gives appropriate directions to his officers. This is a daily event according to his officers. As he emerges out of this interview with BusinessLine, Chandy is mobbed by the people but this day they would have to wait a little longer as he has to proceed for an official engagement. In this interview, the Chief Minister agrees that the Land Acquisition Act has made projects costlier and that GST is good for Kerala. But he is careful to add that he agrees with the Land Act as it now exists and that in a federal set-up Kerala’s interests on GST has to be subservient to the larger good of the country. Excerpts:
In an interview to this newspaper three years ago, you said infrastructure development is your topmost priority. How much of that agenda has been fulfilled?
We have achieved a lot on the infrastructure front. The Kannur international airport is coming up and we are expecting the first commercial flight to land there this December. The Kochi Metro work is going on as per schedule. Coaches will reach in December, trial run will start during January/February and services will start in May/June. The Vizhinjam port was a big challenge. We’ve been trying over the last 25 years to get a move on with the project.
We have now signed the concession agreement, on August 17 this year. Work will begin in early-December after the local-body elections. We will also be inaugurating the SmartCity project in Kochi in December.
Our government’s slogan has been “development and care”. We believe we will take up seriously these two issues. Then only we can have inclusive growth.
Talking of infrastructure projects, both, the GAIL pipeline to transport re-gasified LNG and the Vizhinjam port, are mired in land acquisition issues. How are you planning to get them moving?
This [land acquisition] is the main problem we’re faced with. But we are approaching the farmers and landowners with a good package and good compensation. We’re trying our best to convince them also. If they are not objecting to the project per se, we will find a way out. That is something we are quite sure of. We will give them the maximum possible package and a good compensation.
Here, we are happy that the mainstream political parties are not involved in any of the violent protests. (Those who oppose) are also facing some issues, which we are aware of. They want some deviation (in the alignment) of the pipeline, or maybe they want to avoid it running into some places of worship, or maybe they want more compensation or sweetening of the deal...we’re ready to consider all these.
Unfortunately, some extremist groups are involved in the protests against the pipeline project. They want to incite people and create some problem. We were able to complete the land acquisition smoothly at Kochi for the Metro. We’re trying the same thing with the national highways expansion project. Difficulties are there but we hope to manage these issues since the mainstream political parties are mostly on the same page.
In this context, do you think that the Land Acquisition Act passed by the UPA government is a constraint in executing some of these projects, apart from pushing up costs?
I agree with the second part of your question. It is pushing up costs. I accept that. The landowners are suffering for a common cause. They’re sacrificing land for the good of the society. We need to take care of their interests too. It may be pushing up the costs, but even then I agree with the UPA version of the Act because of this background.
Tamil Nadu has amended the Land Acquisition Act to exempt certain categories. Are you planning something like this in Kerala to make it more industry-friendly?
We’ve already approved the land acquisition rules according to the UPA Act. Now the Centre has agreed to have a separate law for each State. If necessary, we’ll discuss it and take a decision. But we will never reduce the compensation package.
Would you reconsider the social impact assessment and the time period?
For Kerala, land is a precious resource and a rare commodity. So when we go for acquisition, it will be for those projects which are crucial and inevitable.
The partial ban on liquor is affecting your revenues in a big way and also opening up avenues for spurious liquor. Why this ban, and how will you compensate for the revenue loss?
I’m not at all worried about the revenue loss. My assessment is that revenue loss here is only on paper. True, we’re getting more than ₹7,000 crore in revenue from liquor sale every year. When we implement complete prohibition, we will lose this amount. But here, we’re shutting down 10 per cent of the outlets in the first phase. So there’s no big-time revenue loss at one go.
But I never consider this as a loss. We’re spending several times that in social costs since liquor is creating a lot of difficulties for the society at large. These are not quantifiable in monetary terms. Damage wrought on families is also massive. I, therefore, do not consider liquor revenue as real income.
If you count out this money, how will you finance the ‘care’ (welfare) part of your agenda that is close to your heart but demands huge outlays?
As I said earlier, we’re not losing ₹7,000 crore at a time. Now we’re promoting more business and more infra development projects and jobs.
So we will manage. The liquor ban and the impact on government income is not at all a problem for us. We’re not concerned. But the other part, illicit liquor…that’s something we have to deal with. It will be very difficult to manage. However, we’ve done it over the last one year since the ban.
Talking of revenues, GST should benefit Kerala but yet your party is opposed to the Bill….
In a federal system, we’ve to take the interests of all States. GST is beneficial to some States. But it is affecting some others. So we’ve to find a way out. For Kerala it is good. We welcome it. At the same it is disadvantageous to States such as Maharashtra, Tamil Nadu, etc. We’ve to find a solution and KM Mani, at the head of the panel, is a very experienced person. Under his leadership, they’re planning some compromises.
Shouldn’t your party be supporting the GST Bill?
As a national party, Congress has to take the interests of all States. So, in a federal system, we’ve to be very careful. Decisions such as these must be built on consensus. There are some drawbacks in the GST Bill which we continue to oppose.
Kerala has been ranked 18th in ease of doing business. Your reaction?
I read about it in the papers. The same morning I called the Chief Secretary and the Vice-Chairman of the Planning Board and conveyed to them my gut feeling, without seeing the criteria used to rank the States here, that the criteria would likely have been land-related issues, environmental issues, and some licensing issues. I was proved right.
We’re facing some problems here. Earlier, we were pointing our fingers at the workers. To some extent that was correct. Now the working class is entirely changed. They’re very positive.