THIRUVANANTHAPURAM: Experts want the state government to follow fiscal prudence and announce measures for additional resource mobilisation in the annual budget presentation on February 3. The unprecedented financial crisis is to be dealt with through extraordinary measures to increase revenue and plug leakages, they feel. Economist and former Finance Commission chairman B A Prakash asked the state government to rethink pay revision for government employees and pensioners made last year.
“The government should introspect before blaming the Centre for the crisis. The latest salary and pension revision was a huge liability for the cash-strapped government. Official data shows these expenses rose from Rs 47,794 crore in 2020-21 to Rs 72,578 next year. The untimely revision is the single major cause of the current crisis. It should be frozen for the time being. The move can be reinstated when the revenues improve,” he said.
Prakash said the government should state the additional expenses on pay revision. “The official accounts and finance minister KN Balagopal’s claims are contradictory. The minister told the media that salary and pension payout has become Rs 92,000 crore. The total receipts of the state in 2021-22 were just Rs 1.17 lakh crore. How can the government conduct welfare and development programmes?” he asked.
Jose Sebastian, economist and former faculty member of the Gulati Institute of Finance and Taxation, wanted the government to hike social security pensions.“Giving more money to the people will help revive the economy. The welfare pension should be upped by at least Rs 500,” he said.
He suggested taking over the right of property tax from local self-government institutions. “Property tax can bring big money to the government if scientific measures are adopted for tax assessment, collection and surveillance. The rate can be increased across the state,” said Jose. He also called for increasing the electricity duty charged to customers. He mooted a proposal to replace the statutory pension given to retired staffers with an eligible benefit under a contributory pension scheme. “This can help the government in the equitable distribution of resources. The savings can be used to increase the welfare pension amount to Rs 4500,” he said.
Economist Mary George said she expected the government to take measures to increase non-tax revenue. “Non-tax revenue forms 36% of the total revenue of many countries. Compare this with the 10% in Kerala and India. Also, steps should be taken to stop the evasion of GST, especially in gold sales. Almost 80% of gold sales are not properly accounted for, resulting in huge tax evasion. This issue and other frauds in GST payment are to be prevented,” she said. Mary also called for sincere steps against the splurge by the government.
Thomas Issac says India yet to emerge from the impact of Pandemic
T’Puram: The Economic Survey 2022-23 shows that the country is yet to emerge from the adverse effects of the pandemic, said CPM leader Thomas Isaac. “The GDP at the constant price was D145 lakh crore in 2019-20. It declined by 6.6% in 2020-21 to D136 lakh crore. In 2021-22, it rose by 8.7% to touch D147 lakh crore.
The actual increase in 2021-22 when compared to 2019-20 is only 0.69 %. How can this be termed a complete recovery? The average growth in the past four years is just 3.19%.,” he said in a Facebook post. The per capita GDP in 2021-22 is less than that reported in the pre-lockdown year 2019-20. The income of an average Indian in 2021-22 was less than in the pre-pandemic year. The share of capital investment in GDP has steadily declined since 2011 and has become 32-33% now. The review is also silent about unemployment in the rural sector, Isaac said.