When Nirmala Sitharaman presented her interim budget on February 1, three months before the Lok Sabha polls, Kerala Finance Minister KN Balagopal behaved like a revolutionary caught in an unjust war. He projected Kerala's fiscal stress as the result of the persecution of the BJP-led Centre and used the image of a brutalised Kerala to position the CPM at the centre of an anti-BJP alliance that was gathering force in the country.

Now, when Sitharaman is about to present the first budget of the third NDA government, a month after the election results were declared, Balagopal's conduct feels closer to that of a party apparatchik wounded by the barbs of his own cadre. It is not Modi or Sitharaman that Balagopal is bothered about. The adversary is within; this time he is battling TM Thomas Isaac, his predecessor.

Like in previous years, this time also Balagopal has ritually submitted his wishlist to the Union finance minister. It had all his earlier demands: Rs 24,000-crore package, a higher borrowing ceiling, payment of long-pending dues, increase in central transfers, and Rs 5,000-crore special capital investment support for Vizhinjam International Seaport Ltd.

Balagopal vs Isaac
However, during his pre-budget interactions with the media, and also in his speeches during the just-concluded budget session of the Assembly, unlike in previous such occasions, the finance minister seemed more worried about his legacy than what he had termed the ruthless anti-federal ways of the Centre.

"It is totally baseless to say that the second Pinarayi Ministry government has drastically cut down spending. If Rs 1.2 lakh crore was the average annual spending during the first Pinarayi ministry, the average annual spending in the first three years of the second Pinarayi ministry is Rs 1.6 lakh crore. You should not forget that this was achieved even though the Centre was badly smothering Kerala and had deprived us of Rs 57,000 crore during this period," Balagopal said.

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And then what sounded like a pat on the back of Isaac was actually Balagopal giving his senior a spanking. "Kerala is one of the only few states that had implemented pay revision during COVID," Balagopal said, paying Isaac a compliment.

Listen further. "The benefit that was announced during the last days of the first Pinarayi Ministry was given out during the second Pinarayi Ministry. It was this government that took on the burden of paying the higher salaries, pensions and other benefits," Balagopal said. "The DA arrears that piled up between 2017 and 2021 (during Isaac's tenure) were fully credited to the provident fund only after this government assumed power," he added.

There was more to come. "If the first Pinarayi ministry had disbursed Rs 32,000 crore as social welfare pension, the second Pinarayi ministry has paid Rs 27,000 crore in three years alone. So far, KIIFB has spent Rs 30,000 crore. Of this, Rs 20,000 crore was spent during the second Pinarayi ministry."

High disapproval rating
According to top CPM sources, it was the isolation in the party that caused in Balagopal this urgency to defend himself. The party apparatus, at all levels, had expressed disapproval.

The CPM district committee meetings held in the wake of the Lok Sabha polls were highly critical of Balagopal's handling of the Kerala finances and had singled out his performance as the primary cause of the LDF debacle. In most of these committees, piling on the insult, there were comparisons between Balagopal and Isaac.

"There was a general opinion that Isaac would not have touched spending on welfare, pensions and health during a fiscal crisis like Balagopal did. He would have improvised, would have found areas where plan funds could be cut so that the traditional Left promises are honoured," a top CPM leader who attended two district committee meetings told Onmanorama. At one stage, when it looked like there was near unanimity in the party about his failure as finance minister, Balagopal even offered to step down.

Party's apology
Chief Minister Pinarayi Vijayan and state secretary MV Govindan dissuaded Balagopal from taking the extreme step but the finance minister was sternly told to rework his priorities. On July 10, the CM read out a statement in the Assembly under Rule 300 promising the people of Kerala that all pending welfare benefits will be paid out in a time-bound manner.

The Rule 300 statement was evidence, if any was required, that the party was unhappy with the choices made by the finance minister, especially the way he attempted to manage the fiscal crisis by delaying social welfare pensions and scholarship benefits and suspending financial support to Supplyco and paddy procurement.

Isaac's NH gamble
However, Balagopal's decision to show himself in good light vis a vis Isaac has caused some resentment within the party. "Rather than give a break up of the achievements of two Pinarayi ministries, Balagopal should treat the LDF government as a continuity," a CPM state committee member said.

"He should be aware that there is Isaac's hand in the post-COVID surge that the Kerala economy is witnessing, and which he is enjoying in the form of high tax revenues," the leader said.

He was referring to the first Pinarayi ministry's decision to meet 25% (Rs 6,500 crore) of the land acquisition cost of over Rs 25,000 crore for the construction of NH66. KIIFB will release the amount in tranches.

"It was this bold move by Isaac that made the NH66 a reality. The NHAI (National Highway Authority of India) took up the work only after we promised this money. No other state government had done this. As a consequence, Rs 55,000 crore has been invested in 17 reaches of the NH66. In other words, a total of Rs 80,000 crore, including Rs 25,000 crore that will go to households as compensation for land acquired, will be pumped into the Kerala economy," the leader said.

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