THIRUVANANTHAPURAM: Kerala’s own tax revenue rose by Rs 30,000 crore during the past three years, Finance Minister K N Balagopalhas said. “The revenue rose from Rs 47,000 crore in 2020-21 to Rs 77,000 crore in 2023-24. But the state did not gain much from this as there was a considerable drop in central share of funds,” he said.
“The decline in central share has pushed the state into a financial crisis. The 16th Finance Commission should formulate its policies in view of this situation,” he said in a statement released ahead of the finance ministers’ conclave. Ministers of five states will meet in Thiruvananthapuram on Thursday to discuss the approach towards the 16th FC.
The union government fixes the borrowing ceiling for states on the basis of the FC recommendation, Balagopal said. But Kerala witnessed an unusual experience when it was denied even an eligible borrowing limit. “Kerala had the right to borrow 3.5 c of the GSDP, including the 0.5 pc for power sector reforms. But in 2022-23 and 2023-24, the state was allowed to borrow only 2.44 pc and 2.9 pc only. The revenue loss to the state was Rs 16,000 crore. It affected development and welfare activities of the government. The conclave is aimed to gather the opinion of other states on matters like this,” he said.
The minister said the current devolution system required an overhaul. “The FC has the responsibility to protect the rights of state governments, values of federalism and constitutional principles. Kerala hopes that the FC will execute its responsibility . Our demand is to end the disproportionate devolution from the divisible pool to states,” he said.
CM TO INAUGURATE FINANCE MINISTERS’ CONCLAVE TODAY
Chief Minister Pinarayi Vijayan will inaugurate the conclave at Hotel Hyatt Regency here at 10 am on Thursday. The meeting will have the participation of Tamil Nadu, Karnataka, Telangana and Punjab. Balagopal will preside over. Deputy Chief Minister and Finance Minister of Telangana Mallu Bhatti Vikramarka, Karnataka’s Revenue Minister Krishna Byre Gowda, Punjab Finance Minister Harpal Singh Cheema, Tamil Nadu Finance Minister Thangam Thennarasu and Kerala’s Opposition Leader V D Satheesan will attend. Finance secretaries of the five states will also attend.