THIRUVANANTHAPURAM: Even as the Left has been blaming introduction of the Goods and Services Tax (GST) as one main reason for financial crisis, the Economic Review 2017 hopes it would fetch the state more revenue in due course and achieve growth of more than 20 per cent in tax revenues.
The Review, tabled in the House on Thursday on state budget’s eve, termed GST introduction as one of the landmark tax reforms in India’s post-independent history. The GST is a destination tax and Kerala a consumer state, and there are reasons to hope it would bring in more tax revenue.
“Considering the share of service sector in the state GDP, the benefit of GST to the state is expected to be more enormous. Once the current issues in the GST system are resolved, the state is optimistic about a positive turnaround in its revenue growth and revenue-led fiscal consolidation can be restored sooner,” says the review.
The Review, however, pointed at problems in GST implementation including issues related to IT.
Numerous rate changes, failure to ensure that benefits are passed on to consumers, absence of e-way bill, changes in the threshold and attempts to tinker with the architecture of GST have brought confusion and popular protest. The state government has little power to intervene in the situation. The GST’s important fallout has been the erosion of state’s taxation powers, the Review pointed out.
Debt stands at G186,454 cr
The state’s outstanding debt liabilities at the end of 2016-17 became D186,453.68 crore. The annual growth rate of debt has increased from 16.19 pc in 2015-16 to 18.48 pc in 2016-17, and is estimated to become 11.03 pc in 2017-18 with the Budget Estimated total debt of D207,026.81 crore. The debt to GSDP ratio in 2010-11 was 24.24 pc which became 30.22 pc in 2016-17.