THIRUVANANTHAPURAM: A day before formally presenting the white paper on the finance situation, Finance Minister T M Thomas Isaac on Wednesday provided the Assembly with a ‘sneak preview’ on the fiscal situation. He underlined the need for increasing tax revenue to “escape a financial crisis.” However, the minister said welfare measures would not be cut down.
Isaac blamed the situation squarely on the fiscal indulgence of the previous UDF Government. The fiscal consolidation that happened in the 10 years from 2001 to 2011 was lost in the past five years of UDF rule, said Isaac. “Fiscal deficit went down in those 10 years, but it started rising in the past five years. Had the trend of the 10 years continued, we would have been free of deficit now,” he said while presenting the figures during the Question Hour.
Revenue - tax revenue included - has to be doubled by 10 to 12 per cent, he said. Tax arrears to the tune of Rs 12,608 crore exist on sales tax, motor vehicles tax, excise and central sales tax. Of this, Rs 7,595 crore is tied up in court cases, while Rs 5,013 crore has no encumbrances. Revenue recovery procedures would be launched soon after meetings with District Collectors to collect the latter amount, Isaac said.
Non-plan expenses during the UDF rule went up from 25% to 30%. “The real question is what the availed loans were used for. The lion’s share - 60 to 70% - of the loans were spent on meeting the daily expenses of the govt. It has become a dead weight upon us,” he said.