Out of the 60-odd MLAs of the CPM who will form the bulwark of the next LDF government in Kerala under Pinarayi Vijayan, none other than P Rajeev, the 54-year-old industrious commissar from Kalamassery, looks likely to be the state’s next Finance Minister. This is based on a reading of the academic and political background of the CPM’s winning candidates and not on any party inside information.

And he will have a smooth honeymoon year as the state treasury has a fridge that is full, with about Rs 3000 crore as cash balances as on date. For a state that has a fiscal deficit of about Rs 30,000 crore, this is a huge cushion for whoever comes in to steer Kerala’s finances.

The Centre has also released yesterday Rs 8800 crore under the State Disaster Response Fund (SDRF), about 50 per cent of which the states can use for COVID-19 containment measures. It is estimated that at least a few hundred crores would be Kerala’s share.

Soon after government formation, a budget will have to be presented to the new Assembly as Dr Thomas Isaac’s presentation on January 15 was a vote on account. From an academic perspective, there will be no interest on any allocation except for what the government does for hiking the social security pensions/Covid relief measures and also on health spend.

The state spends less than 1.5 per cent of the Domestic Product on health and family welfare but unless the tax to GDP ratio improves, it cannot hope to continue even the existing proportion of spend as the state’s finances are already stretched.

The real test for P Rajeev (if he is picked as FM) will be in FY 22-23 and beyond. But the economics and law graduate hailing from Meladoor near Mala in Thrissur is known to be a hardworking politician, who learns fast on the job. He left an indelible impression in his term as a Rajya Sabha MP, prompting the former Union Finance Minister, the late Arun Jaitley, to quip that “Rajeev’s leaving will be a relief for the Treasury benches as he was thorough with rules and procedures and would often put the government on the mat”.

At home in English as well, the current Editor of the party daily Deshabhimani has an open mind and is learnt to have built friendships cutting across the political spectrum during his parliamentary stint.

The state has also a bureaucracy which will provide continuity of approach with the the seasoned 1989 batch Additional Chief Secretary Rajesh Kumar Singh at the helm of affairs.

In the medium term, unless the state brings in changes to mobilise resources by levying bearable user charges for its various services based on the principle of “ability to pay” instead of giving away everything free to all and reins in government expenditure by cutting down on the huge number of the “spoils of power” posts (the number of PSC members, 21, is a case in point), any Finance Minister will find it hard to find endless money for the welfare model Kerala wants to be.

There is no use dreaming of a Nordic country welfare state. And if there is any party which can initiate this fundamental reform in the state’s finances it is the CPM. The logic is simple — nobody can hope to bring these deep-going changes when the DYFI, the CITU and the SFI are part of the Opposition in Kerala!

(S Adikesavan is a top bank executive. Views are personal.)