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Left with Little Money, Kerala Finance Minister Blames Centre

In Important, Kerala, News
February 07, 2020

With the Kerala coffers in a depleted state, Finance Minister Thomas Issac, while presenting his 11th budget in the Assembly on Wednesday, blamed the Centre for the situation, saying that it is appropriating the powers of the states in all areas with its unilateral decision to amend the Citizenship Act.

“The federal nature of the Indian Constitution is getting diluted every day. The incursion of the central government into the State Lists, nullifying the Seventh Schedule has become so rampant. Executive power is also being misused. The GST Council, the Fiscal Responsibility Act and the 15th Central Finance Commission, all seem to have deprived the state governments of their entire fiscal freedom. It is apparent that the economic policy of the central government is to strangle the state government financially,” Issac said.

“The central government is not ready to give the due GST compensation for the month of December 2019. The arrears will cross Rs 3,000 crore in February. In addition to this, there is indication that Rs 6,866 crore received as tax share for the last quarter of the previous financial year would come down to Rs 4,525 crore during the current financial year.

“Thus, there will be a total shortfall of Rs 8,330 crore in central assistance, including loans, for the months of January, February and March 2020. This has put unprecedented financial constraints on the state exchequer. There are also huge amounts pending to be released from the centrally sponsored schemes,” added Issac.

With local body polls to be held later this year, and the Assembly polls due in the first half of 2021, Issac used his budget speech to make a comparison with the previous Oommen Chandy government.

“The total outlay for the local self-government institutions, which had been Rs 7,679 crore during 2015-16, is enhanced to Rs 12,074 crore in 2020-21. During the period of the previous government, an amount of Rs 503 crore had been spent from the Chief Minister”s Distress Relief Fund. But during the four years of the LDF government, the amount has surpassed Rs 1,216 crore. During the tenure of the previous government, the total capital expenditure provided in the budget was Rs 29,689 crore. Whereas the total expenditure provided in the budget for the last four years of the LDF government was Rs 40,497 crore,” Issac said.

“During the period of the previous Government, 4.9 lakh drinking water connections were provided by Kerala Water Authority. The LDF Government have provided 7.5 lakh connections so far and 2.5 lakh more houses will be given water connection in 2020-21. The previous government had spent Rs 7,191 crore for health-related schemes. The LDF government have already spent Rs 9,651 crore. The number of outpatients in government hospitals has increased to 3.3 crore from 1.2 crore and the number of in-patients has escalated to 9 lakh from 5.4 lakh,” he said.

He said that the social welfare pension amount has been increased by Rs 100 to touch Rs 1,300 every month. One lakh houses and flats would be constructed in 2020-21, he added.

To generate additional resources, Issac has decided to increase the tax rate of motorcycles not exceeding value of Rs 2 lakh by one percent, and that on motor cars and private service vehicles for personal use not exceeding value of 15 lakh will be increased by two per cent.

Issac has increased the rates of taxes in land and also in stamp duty and expects to raise an additional Rs 700 crore. Dismissing the budget as a routine exercise by Issac, leader of opposition Ramesh Chennithala said the current government is best known for only announcements and less known for implementing the announced projects.

“Many of the announcements this time are carry overs from the previous year and Issac is known for this. To quote a few examples, right from 2006 he has been speaking of generating money from desilting of dams, but till date nothing has happened. Branding of Wayanad Coffee was also there last time, but no one has been fortunate to have that product till now. This is nothing but an eyewash and a blame game,” Chennithala said.