THIRUVANANTHAPURAM: Kerala has urged the Centre to come up with a state-specific package in addition to extending GST compensation period for five more years to tide over Covid-induced crisis. At the pre-budget consultations convened by Union Finance Minister Nirmala Sitharaman on Thursday, Finance Minister K N Balagopal urged the Centre to support the state with additional grants.
Balagopal said the delay in releasing GST grants compels states to go for short-term borrowings bearing interest cost. He pointed out that the state has been suffering a huge fall in revenue from the divisive pool. The state’s loss in 2020-21 would come to around Rs 6400 crore. The Union Government should compensate for the revenue fall and ensure sustained support, he said.
Referring to the recent tendency of the Centre increasing cess and surcharges well above the basic tax rate and spiralling fuel price, the minister urged the Union Government to either remove or reduce the cess and surchage, especially on petrol and diesel.
‘Awaiting technical sanction’
The state finance minister also requested to expedite clearances for the SilverLine semi-high speed rail project. Later speaking to the media, Balagopal said the state is awaiting technical sanction from the Centre. He also expressed concerns that the negative approach by opposition parties may pose a hindrance to obtaining Central clearance
Other major demands
Annual borrowing ceiling of the state should be made unconditional. It should be brought down to 3% by 2025-26 through a reduction of 0.25% every year.
External borrowings from multinational and bilateral agencies through DEA should be kept outside the state’s normal borrowing ceiling for three years starting this fiscal.
Centre’s allocation under Centrally-sponsored schemes should be increased. Also state specific grants should be allowed to states.
National Health Mission should be made a 100 pc Centrally-sponsored scheme
Special assistance package in Union budget to support counter cyclical measures taken by states to stimulate economic recovery.
Current ways and means limit should be continued till next revision
Separate rehabilitation package for migrants returning to the state.