Kerala floods one month after: Government adopts all strategies to raise funds

KOCHI: Even as the LDF Government adopts all strategies - beg, borrow and coerce - to raise funds for rebuilding the flood-devastated state, a huge amount of money owed to the exchequer is, surprisingly, not tapped yet.

According to the budget papers, a total of Rs 11,866.9 crore is owed to the government under various heads at the end of the 2016-17 financial year. Even more perplexing, Rs 4,526 crore in the figure is undisputed – meaning the amount can be collected without any hassles.

Though Rs 7,340.96 crore in the total figures is disputed, as per the budget note, experts said the ongoing crisis situation can help the government go for a kill and fetch this amount too without much of a trouble.
“It is really baffling why the government which is going all out to collect whatever it can and announcing various measures including salary challenge is not taking hard steps to collect this huge amount of money due to them,” said Mary George, former chairperson of Public Expenditure Review Committee. “The flood-devastation and the pressing need for funds to rebuild the state should be used to collect the money, which rightfully belongs to the exchequer,” she said.

She, however, clarified that she was not against steps such as salary challenge – asking the government employees to contribute one month’s salary for flood relief - saying the government staff should have come forward to help the state, which is in distress now in the aftermath of the floods. On the amount due to the exchequer, she said, “The government must use measures such as one-time settlement to get the amount from the evaders.”

The state government has already hiked the excise duty on liquor by 0.5 per cent to 3.5 per cent for 100 days, aiming to collect Rs 230 crore additional revenue for the CM’s Distress Relief Fund (CMDRF). The government also collected Rs 100-odd crore through a special lottery, ‘Ashwas’, priced at Rs 250 a ticket. Though the CMDRF amount has nearly touched Rs 1,500 crore, this will be grossly insufficient, considering the enormity of the damage in the worst floods to hit Kerala in a century. Official estimates alone put the amount required at over Rs 40,000 crore.

A closer look at the amount owed to the government shows, in the undisputed category, a total of Rs 4,484.41 crore is due to the exchequer from taxes on commodities and services. Another Rs 38.73 crore comes under ‘taxes on property and capital services’ while a total of Rs 2.86 crore is due under the segment ‘tax on agriculture’. In the disputed category, a total of Rs 7,159.15 crore comes under ‘tax on commodities and services’, Rs 10.49 crore from land revenue and Rs 28.24 crore under stamps and registration. Jose Sebastian, economist and associate professor, Gulati Institute of Finance and Taxation, felt the government was not embarking on this fund collection drive due to the backlash that it may get from the public. “To avoid any such negative publicity or backlash, the government should use its discretionary powers so people affected by the floods can be excluded from this collection drive,” he said.
“The flood has not affected all parts of the state; businesses such as jewellers continue to fare well. If money is due from these segments, the government should go ahead and collect those funds. If anyone is genuinely affected by the floods, they can be excluded,” he said.

Exploring new vistas to rake in the moolah

The state government has hiked the excise duty on liquor from 0.5 per cent to 3.5 per cent for 100 days. It is aimed at collecting Rs 230 crore additional revenue for the CM’s Distress Relief Fund

By launching a special lottery named Ashwas, which is priced at Rs 250 a ticket, the state government has collected Rs 100-odd crore

Rs 1,500 cr is the contribution to the CMDRF so far