Now, amid signs of a major economic downturn in the country appearing all too real, Finance Minister T M Thomas Isaac outlines the steps needed to stem the decline. Demonetisation and GST have also left the Indian economy tottering, he tells Express.
Excerpts:
Will the slowdown exacerbate Kerala’s fiscal position in the wake of the back-to-back flood?
Indeed. The slowdown will deepen the economic crisis in Kerala. Back-to-back flood has spelt economic gloom. The post-flood crisis coupled with the slowdown will put us in deep, deep trouble.
Will the sluggish economy impact the GST revenue’s expected rise?
With GST, I still have hope. Earlier, there was no system and we could not check if somebody was taking excess input credit. Now, data on annual returns are available and hence malpractice can be checked. Also, with real-time access to e-way bill portal, enforcement can be strengthened. The GST revenue will definitely improve as expected.
Has the global crisis started affecting our remittance economy?
The NRI remittances have already been affected. A more pertinent aspect is the NRKs’ reluctance to spend. This has affected our markets. When the crisis worsens, spending will further decrease and the market will become dull.
Its ripple effect on Kerala economy
Kerala has a challenging time ahead since foreign remittances could be affected. But Kerala Infrastructure Investment Fund Board(KIIFB) will be a big relief through which we are implementing a Rs 50,000-crore stimulus package. KIIFB is a model for the Centre in these trying times.
Why the country’s economy is slowing down?
It is wrong to squarely blame the global trend for the present situation. The root cause is demonetisation which lowered the economic growth in 2016-17. This, combined with the hasty implementation of the GST, resulted in a huge drop in tax revenue. You cannot do a course correction without admitting the truth.