Austerity measures likely as revenue collection dips
The state exchequer has finally begun to feel the pinch of the general economic crisis and the government is planning some belt-tightening measures. Tax and non-tax revenue in the state have dropped by 3 to 4 per cent against targets as revenue spinning departments have recorded a slight decline in revenue, Chief Minister Oommen Chandy told a post-Cabinet media briefing here on Tuesday.
“Naturally, steps will have to be mooted for curtailing expenditure. A special Cabinet is scheduled for October 10 to evaluate the scenario threadbare and recommend measures to overcome the situation,’’ he said.
“There is no economic crisis in the state. But we cannot ignore the emerging situation. Strict financial discipline is essential. Ways have to be found to increase the revenue from various sources,” he said. At the same time, he said that tax and non-tax revenue have increased in the current fiscal than the same period in the preceding year, but have fallen short of estimated accruals. Chandy, however, asserted that the government would see to it that the economic situation would not interrupt expenditure earmarked for development activities and welfare programmes in the Plan fund. “The Union Government and many other states have initiated many measures to deal with the situation. Unlike that, the state will never curtail Plan funds or scissor development and welfare expenditure,” he said.
“There will not be any restrictions in the development front on account of the economic issue. But a modest outlook will be maintained in the creation of new posts,’’ the Chief Minister maintained, when asked whether the economic issue would lead to a bar in the sanctioning of new posts.
“In the past two years, 15,000 posts were newly created by the present government. The annual financial commitment for the state exchequer through the measure alone is `460 crore,” he pointed out. Asked whether the impending economic crisis confronting the state is not a failure of the Finance Department for not foreseeing or planning adequately, Chandy replied in the negative.
“It is not so. The scenario is a reflection of the general economic situation which has gripped the society. Never in the history of the state the Finance Department had sanctioned funds to this extent as under the present government for development activities,” the Chief Minister said.