THIRUVANANTHAPURAM: After presenting the last full budget of the second Pinarayi Vijayan government, Finance Minister K N Balagopal spoke to TNIE, elaborating on his decision to eschew a populist approach in favour of fiscal well being. He also emphasised the importance of formulating a more sustainable model for KIIFB and threw light on the government’s plan to proceed with the rehabilitation of Wayanad landslide victims.
Excerpts
How can you justify the increase in land tax? The UDF has already raised objections
The increase will have minimal impact on common people. Although a 50% hike sounds significant percentage-wise, a person with 10 cents of land will only pay an additional Rs 10, thereby raising the annual tax from Rs 20 to Rs 30.
We haven’t properly addressed the issue for the past 50 years, and Kerala currently has the lowest land tax in the country. We must consider that the government has invested Rs 900 crore for the modernisation and digitisation of village offices alone.
Why did the budget avoid increasing social-welfare pension despite expectations?
We remain committed to the LDF manifesto’s promise of increasing the pension to Rs 2,500 per person. However, there were no cuts in central grants when the manifesto was released. And we’ve faced more financial crises in our second term. Last year, we couldn’t disburse five instalments worth Rs 5,000 crore; managing just Rs 2,000 crore. Next year, we must cover the remaining Rs 3,000 crore.
Has KIIFB undergone a course correction with a focus on revenue generation?
KIIFB has always had a revenue-generating model. KIIFB has projects in IT parks and GIFT City, which generate returns despite long gestational periods. Similarly, there are projects without a revenue-generation component, such as the development of schools and hospitals. In the budget speech, I mentioned developing an IT park on Kollam corporation’s land. Collecting toll is one of the revenue-generating models we’ve discussed.
You started the budget speech stating that the state has overcome severe fiscal constraints. What is our current financial position?
The financial situation has improved from the stagnant phase during Covid. From Rs 1.59 lakh crore previously, this year’s annual expenditure, as per the revised budget estimate, has increased to Rs 1.78 lakh crore. It’s a positive trend.
What has changed to allow for additional expenditure?
There has been an improvement in tax revenue, from Rs 47,000 crore post-Covid to Rs 81,000 crore. Including non-tax revenue, the total is now Rs 1 lakh crore.
There were concerns regarding Wayanad rehabilitation following the central budget. How optimistic are you about the project?
We will start construction as soon as the land is made available. The township project will proceed as planned, regardless of whether we get additional funds from Centre or sponsorship.