India: Cash-strapped Kerala mulls cess on ‘ghost’ houses

Pala, Kottayam: The beautiful environs of the 140-year-old tharavad (traditional Kerala house) of Alex Kurian Njavally at Pala in Kerala’s Kottayam district, surrounded by rubber plantations and fruit trees would be anyone’s envy.

But like numerous other families in Kerala which are facing the social implications of their children migrating abroad, 75-year-old Njavally and his wife Philomena are also left alone in their house, with their married daughter and son based in London and Mysore, respectively.

Should they decide to abandon the house and settle in London, or the fast-growing south Indian city of Mysore with their son and his family, the Kerala government has a fine in the pipeline — a cess on vacant houses, proposed in the state budget announced earlier this month.

The cash-strapped Kerala government, whose debts are approaching the Rs4 trillion (about $48 billion) mark, has proposed the new cess as part of its resource mobilisation for the 2023-24 financial year.

The trigger for the new cess is apparently the exodus of students and workers from Kerala to all parts of the globe, which in turn has led to over a million houses in the state lying vacant, and are now on the radar of the state government as targets for resource mobilisation.

Rough estimates put the number of students from Kerala going abroad for higher studies to developed countries alone at 35,000 last year. The total migration would be much more, considering departures to other nations.

A study by the state government entity Non-Resident Keralites Affairs department (Norka-Roots) has found that students from the state have gone to as many as 54 countries including the Isle of Man.

Besides the students, another parallel exodus is of workers and professionals leaving the state — the most prominent are nurses — to several countries.

A study by economists S Irudaya Rajan and K C Zachariah in 2018 had shown that one in five families in Kerala have a migrant member. The vacant houses mostly belong to the migrants, who will be at the receiving end of the decision to impose a cess on such houses.

The spike in migration in recent years has led to three striking patterns — an increase in the number of vacant college seats, vacant homes and a rise in old-age homes.

A local newspaper reported recently that over 4,000 seats were lying vacant in science stream subjects alone in Kerala’s undergraduate courses. The situation is more acute in engineering education: of the 51,000-odd engineering seats in Kerala, about 23,000 have no takers.

Equally conspicuous is the increase in old-age homes that are coming up in all of Kerala’s 14 districts. For nearly half a century, the remittances flowing into Kerala have translated into palatial houses across the state, but now with many of the youth deserting the state, it has become difficult for elderly parents to stay in the sprawling mansions.

Even for those who are living in traditional houses built before the migration wave, it is difficult to manage without their children around. Says Alex Kurian Njavally: “Maintenance is the difficult part when you are living in a large house. When families were large, the sheer number of members ensured that the building was taken care of, but today with only an elderly couple or sometimes a lonely senior person living in a big house, the building falls into disrepair. The shortage of workers has added to the challenge in the upkeep of houses.”

Between 2001 and 2011, house construction witnessed a boom in Kerala, growing by nearly 20 per cent to touch a total of 11.2 million. Today, an estimated 1.2 million of them are lying vacant because the owners have migrated or sometimes because of multiple ownership of houses by individuals.

The new Kerala budget proposes to hike the application fee, scrutiny fee and permit fee for construction of residential and commercial buildings, as well as impose a cess on new houses left vacant.

The decision points to the twin issues facing the state government — its need to raise finances from whatever source to foot its ever-growing interest, pension and salary bills, also to protect the environment from the construction of unwanted houses.

Critics feel the proposal for a cess on ‘ghost’ houses is only a short-term measure. In the long term, they say, the state government will have to identify the reasons for the exodus of its daughters and sons from the state and remedy that.