Kerala Budget: Burning issues ignored

Budget document with 15 % additional expenditure than previous fiscal lacks sufficient revenue mobilisation plans

Published: 09th February 2020 06:33 AM  |   Last Updated: 09th February 2020 06:33 AM   |  A+A-

By Express News Service

THIRUVANANTHAPURAM:  Finance Minister Thomas Isaac chose to ignore some burning issues faced by Kerala in the annual budget 2020-21 presented on Friday, presumably to save his front’s electoral prospects in the Assembly elections next year.   

In Isaac’s own words the state is facing the worst-ever financial crisis. But the budget document with 15 pc additional expenditure than the previous fiscal lacks sufficient revenue mobilisation plans or measures to cut down the abysmally high non-plan revenue expenditure, mostly salary and pension.  

Isaac has pegged additional resource mobilisation at Rs 1,103 crore as against the estimated fiscal deficit of Rs 15,201.47 crore. An ambitious 21 pc tax growth rate proposed in the budget is easier said than done. The previous budget had aimed 30 per cent growth in tax revenue and until December the figures showed a meagre two percent growth.

Economist and former chairman of the Kerala Public Expenditure Review Committee Prof B A Prakash said that the budget lacks programmes to address the real reasons behind the fiscal crisis.  “Curtailing non-plan revenue expenditure is imperative for the state’s progress. Proposed restriction on posts creation, control over aided school appointments and redeployment of LSG staff are welcome gestures, but quite insufficient,” he said.

“The government has not even revised the old tax structure in local self-governments, let alone innovative measures for additional resource mobilisation. There was ample scope for revising the tariffs like the property and professional taxes,” he added.  According to Prakash, the state need to revise the salary and pension of government employees only once in ten years as against the present five year period. The additional financial commitment after the last revision is Rs 7,700 crore a year.  

E700 crore savings

The ongoing scrutiny of social security pensioners is expected to help the government save at least Rs 700 a year. According to Thomas Isaac, the previous beneficiary list had thousands of ineligible who were enrolled by the whims and fancies of LSG representatives. The state spends around Rs 600 crore every month to pay pension to about 50 lakh beneficiaries under five categories - agricultural labourer, old age, disability, unmarried women above 50 years of age and widows. This amount is set to go up in the next fiscal as the government has raised the monthly pension from Rs 1,200 to Rs 1,300.

Rs 1,103cr was the cost at which additional resource mobilisation was fixed against the estimated fiscal deficit of Rs 15,201.47 crore.

Economist B A Prakash says the budget lacks programmes to address the real reasons behind the fiscal crisis. 

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