THIRUVANANTHAPURAM: The state is reeling under severe economic crisis, Finance Minister TM Thomas Isaac informed the assembly on Tuesday. He said the various financial policies implemented by the Centre including demonetisation and GST, and floods were the key reasons for the state’s economic slowdown.
“Demonetisation, GST and the floods affected the state in 2018 and 2019 had a negative impact on the financial sector in the state by and large. Besides, the Centre had cut down the state’s share of approved loan which worsened the situation. The Union government cited an increase in the fund in PF treasury accounts. However, we had expected approval for a loan of Rs 4,908 crore from the Centre during the final quarter of the current financial year, but it gave the approval for only Rs 1,920 crore,” Isaac said.
He also pointed out that there has been a huge liquidity crisis due to the delay in dispensing the compensation following the loss incurred due to GST implementation.
“We have not received the compensation from October last year. The compensation being paid every two months will be around Rs 1,600 crore. The corporate tax exemption will also affect the income through tax here too,” Isaac added.
Despite the floods, the Centre has not allowed the state government to avail loan beyond the limit for the rebuilding initiative, Isaac said.
The total revenue income of the state until November 2019 was `55,747 crore, an increase of 1.32 per cent compared to the last financial year. As far as tax revenue was concerned, there had been an increase of 1.30 per cent. The non-tax revenue increased to 19.22 per cent, but there had been a slump in the Centre’s tax share by 1.63 per cent and grant in aid by 12. 84 per cent. So in total, there has been a dip of 8.41 per cent in revenue deficit, Isaac said in the assembly. He also said economic stimulus measures are underway through KIIFB.