THIRUVANANTHAPURAM: Finance Minister K N Balagopal on Wednesday blamed the cut in devolution from the divisible pool for the state’s financial crisis. Kerala’s share in the pool was 3.85% which came down to 1.92%, a reduction of Rs 18,000 crore. Another reason for the crisis is the termination of the GST compensation scheme.
Balagopal termed the Opposition protest against the additional tax on fuel as disproportionately large. The 2015-16 budget presented by the UDF government had effected a similar tax, he said, adding the LDF government did not reduce social sector spending despite financial crisis.
“The protest will only help divert people’s attention from anti-people policies of the Centre. The Congress has sided with BJP to create a riot-like atmosphere in the state,” he said, adding, “GST arrears pending to the state were Rs 4,000 crore when I assumed office. Now only Rs 750 crore is left. The state’s demand is to extend GST compensation scheme.”
He urged MPs from Kerala to press for this demand. The next financial year will see a big financial crisis, he said.Meanwhile, Balagopal also said he had sent letters to the Union Finance Minister and Group of Ministers under the GST Council to raise objection against the new five percent tax on pre-packed and labelled food items.
He was responding to the TNIE report that Kerala had not expressed its dissent in the GST Council as claimed by the state government. The minister said he never said that he expressed dissent in the council. “I had handed letters to the Group of Ministers and the Union Minister. The Chief Minister too had issued a statement then,” he said.
“Dissent need not be given on all matters. We expressed our opinion and handed the letter which was made public. The Union Minister too had raised a similar argument that the states did not express dissent at the council meeting. Kerala’s opinion, now and then, is that tax should be increased on luxury goods and not small goods that would affect the poor people,” he said.