Kerala third in own tax revenue growth: Finance Minister K N Balagopal
He said that the reduction in tax devolution, the end of GST compensation and the slashing of borrowing limit are the reasons for the present crisis and blamed the central government for it.
THIRUVANANTHAPURAM: The debate, not the core issue, took centre stage at the discussion on the adjournment motion over the financial crisis faced by the state government. The fiery speakers from the treasury and opposition benches seemed to be least bothered about the way forward for the state that faced a shortage of Rs 13,000 crore due to the restrictions on market borrowings.
Finance Minister K N Balagopal claimed that his government managed the finances remarkably despite the cuts in funds and borrowing restrictions imposed by the Central government. “The Opposition and a section of the media claimed that the treasury would have to be shut at the financial year-end. But things did not happen as they wished. Local self-governments fully utilised the Plan Fund and the government disbursed Rs 22,000 crore in March alone,” he said. The government also spent Rs 18,000 crore during Onam of which Rs 400 crore was spent on market intervention activities, he said.
The minister said the state is now ranked third in the country in terms of growth in its own tax revenue. 23.4 per cent growth was registered in the previous financial year. There was 51 per cent growth in total tax revenue and the collection stood at Rs 71,900 crore. He blamed the Central government for the present crisis. The reduction in tax devolution, the end of GST compensation and the slashing of borrowing limit are the reasons for the crisis.
He said for every rupee collected from the state as tax, the Centre returned just 25 paise as the state’s share. The share for Tamil Nadu is 40 paise, Karnataka 47 paise, Uttar Pradesh Rs 2.73, Bihar Rs 7.61. Tax devolution to the state dipped from 3.5 pc to 1.925 when the 15th Finance Commission adopted the 2011 Census as the basis for calculation. He said the Centre did not heed to the demand for allowing an additional borrowing space of 1 per cent of the GSDP. Congress legislator Roji M John who moved the notice for adjournment motion blamed the state government for not claiming the IGST share due to the state. Quoting a report by the Public Expenditure Committee, he said the state could not claim an IGST share worth Rs 5,000 crore every year.
Leader of Opposition V D Satheesan said the state government was hiding its lapses by blaming the Central government. The state government received Rs 53,000 crore as a revenue deficit grant between 2021 and 2026. The current issue is to be linked with the drop in tax collection. The state has become a haven for tax evaders. The state failed to submit IGST claims in time and it resulted in a a loss of Rs 50,000 crore-Rs 75,000 crore in the past five years. The tax revenue is not witnessing a growth proportionate to inflation.
The government could not even collect the arrears during the VAT regime. Tax revenue from gold sales did not see a periodical rise.
Though the price of gold increased from Rs 500 per gm to Rs 5,000 tax revenue saw a dip. The Opposition is ready to put up a joint fight against the discriminatory steps towards the state government. But the state should do its duties first before blaming the Centre, he said.