The Kerala CM has urged the central government to address the financial concerns of Kerala after massive tax hikes in the state budget.
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Anand Kochukudi/ : Kerala Chief Minister Pinarayi Vijayan on February 9 sought to address Kerala’s financial worries after massive tax hikes in the state budget. The same day ES Bijuman, a literacy ‘motivator’ working under the Kerala State Literacy Mission, committed suicide after not receiving his salary for nine months. Bijumon, who received the President’s Award for Best Literacy Motivator, was involved in the strike by the Pracharaks’ Association in Thiruvananthapuram. This contradiction is largely reflective of the situation the state has been passing through for some time now.
it’s called his hat his head
On the one hand, the biggest headlines of the budget were the introduction of a fuel cess of Rs 2, while the Chief Minister was seen in a belligerent manner during the press conference. The Chief Minister was asking whether the state should instead stop giving welfare pension to its 60 lakh beneficiaries. It seemed as if he was putting the responsibility of distribution of pension on the general public. There was no remorse for swindling the public, nor was there even the slightest bit of responsibility for the financial mismanagement that led to the wretched situation. Instead, the responsibility for everything was being handed over to the Centre.
Fuel Cess i.e. Fuel Cess is expected to bring only Rs 750 crore to the exchequer. This is less than the money needed to pay social welfare pensions for one month, with Kerala’s outlay estimated at around Rs 11,000 crore. The untimely increase in salary and pension of government employees on the pretext of voting before the 2021 assembly elections is the biggest reason for imposing fuel cess and implementing tax hike. Since it was already in force before 2019, Kerala’s budget in the post-Covid situation went awry in one fell swoop.
In other words, those who are affected by the fuel cess and tax hike are paying for the expenses incurred by today’s elite and bureaucrats of Kerala. Even non-payment of social security pension and salary of motivators is the result of this miscalculation.
giving importance to the rich over the poor
On one hand the increase in tax in all sectors has affected the poor, while on the other hand the rich are getting tax exemption. This is often done secretly. Recently abolishing many taxes related to plantation sector and giving tax concession to liquor manufacturers are some examples of this. The plantation sector and liquor lobby, which are considered to be good sources of income, have often caused huge losses to the exchequer and have also managed to get undue benefits.
Another cess imposed on liquor bottles
In November, the burden of loss due to the tax exemption given to liquor manufacturers was passed on to the consumers, who somehow avoided paying 251 per cent tax. Now in the budget, another cess has been imposed on liquor bottles priced above Rs 500 and Rs 1000. This is happening at a time when Kerala is witnessing a boom in drug trafficking and banned tobacco products.
Misunderstanding of Finance Minister KN Balagopal
While former finance minister Thomas Isaac blames the financial mess on decisions taken in Pinarayi Vijayan’s first term that led the state government to a financial crisis, his successor KN Balagopal hasn’t fared too well. Balagopal’s miscalculation goes far beyond imposing fuel cess which is unimaginable. Especially by someone who keeps blaming the Center for imposing fiscal restrictions in the current financial year. Balagopal failed to access Rs 1,619 crore during the financial year 2021-22 when Kerala’s borrowing limit was higher.
trying to fix levy
The fact is that Balagopal is trying to fix the levy of Goods and Services Tax (GST), but necessary steps are not being taken to stop the leakages immediately. The Center had adjusted Kerala’s off-budget borrowings to the Kerala Infrastructure Investment Fund Board (KIIFB) and the Kerala Social Security Pension Limited (KSSPL) by March 2022, giving Balagopal plenty of time to revise his estimates. But due to wrong decisions, within six months in the current financial year, the exchequer came under huge financial pressure.
50% of the plan fund
The report of the Comptroller and Auditor General (CAG) has proved baseless the decision of Finance Minister Balagopal to increase the tax in haste. In the CAG report, 22.3 per cent of the state’s revenue has been told as arrears. Vijayan referred it to the Public Accounts Committee (PAC), but for a party that has created a lot of hue and cry over CAG reports in the past, it will not be easy to ignore this report.
Adopted method of using electronic ledger
With less than a few months to go for the financial year to end, Kerala’s plan fund has stagnated at 50 per cent. The plan fund, including the amount allocated to centrally-aided projects and local bodies, is around Rs 39,640 crore, but it is stuck at more or less 40 to 50 per cent due to paucity of funds. Since the second term in 2016, the government has adopted the dubious method of using electronic ledgers to transfer projects to the next financial year without officially declaring them.
Sad times for the ‘Kerala model’
Cutting back on small schemes is one thing, but a government touting the ‘Kerala model’ has repeatedly failed to deliver on its welfare promises. Even the much talked about social security pension is getting delayed by months. The arrears of paddy procurement in Palakkad and Kuttanad are pending for months. Even the dues of Kerala Horticorp have not been paid to the vegetable farmers even after months.
Monthly assistance of Rs 5,000 for three years was paid only once to the dependents of those who died of Kovid for Below Poverty Line ie BPL families. Similarly, many people including the Endosulfan victims are owed money, who sometimes get a small amount. The suicide of ‘motivator’ Bijuman has exposed the misery of unpaid wages for nine months among this particular group. Food outlets run by Kudumbashree self-help women groups are also facing financial crisis as the government has not extended the subsidy given to them. After this, food outlets have been forced to close at many places.
Even the organized employees of the Kerala State Road Transport Corporation (KSRTC) have been working without pay for months. They have to go to the court regularly. It almost gives the impression that the government is not interested in rectifying the situation.
no end to extravagance
There is no limit to extravagance despite failing in its duty to deliver on its welfare promises. The Chief Minister and Ministers go on foreign tours for fun regardless of anything. In Delhi, defectors like KV Thomas are political appointees above the Resident Commissioner and Officer on Special Duty (OSD) in Venu Rajamony, they get the status of a cabinet minister and are paid a hefty ‘honorarium’ from the state exchequer. ‘ Are being given. Brand-new cars are ordered from time to time for ministers and even political figures running state corporations. Such extravagance at the cost of high tax for the general public is a living example of financial mismanagement.
State government can get grant from center next year
Chief Minister Vijayan has announced several projects in the next 100 days on the occasion of the second anniversary of his second term. However, effectively the ribbon-cutting competition will remain on paper till the next financial year as the state government may get grants from the Center next year. Worse, the government is running short of funds. Due to this, there may be a delay of three months in the pending pension payment from the month of December. The Vijayan government can blame the Center at will, but the current crisis is mostly of its own making.
(Disclaimer: The views expressed in this article are those of the author only. The views and facts given herein do not represent the stand of TV9.)
Source: www.tv9hindi.com
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