THIRUVANANTHAPURAM: Desperate times call for desperate measures. Finance Minister Thomas Isaac is expected to announce some additional resource mobilisation measures in Friday’s budget, which may burn a hole in the common man’s pocket. Austerity measures may also find a mention in the budget.
Land fair value and fees for various government services are expected to go up. Raising of retirement age is unlikely though it will help the cash-strapped government to save a considerable amount at least for two fiscals. There won’t be big-ticket projects and focus will be on effective allocation of funds.
Economic slowdown coupled with other setbacks like consecutive floods, stagnant growth rate of taxes and drop in Central funds make this year’s budget the most challenging one for Isaac.Though the previous budget had aimed an ambitious 30 per cent growth in tax revenue, it did not work. Isaac set the target hoping that the Centre would share the data on GST return filing so that evasion could be plugged. But this did not happen.
The Union budget presented on February 1 announced a huge cut in the state’s share in the divisible pool of Central taxes. Immediately after the Union budget Isaac had hinted that Kerala would have to look for additional resource mobilisation to the tune of `5,000 crore.
As per the 15th Finance Commission’s interim report, states will receive only 41 per cent share of total Central taxes in FY 21, a one per cent decline from the current fiscal. Kerala’s share from this has been reduced from the existing 2.5 per cent to 1.9 per cent. These changes will result in a net loss of around ` 4,300 crore to the state.
Kerala’s share in Central taxes in 2020-21 will be `15,236 crore, as against `17,872 crore in this fiscal.