Financial condition not worrisome: Kerala FM

State facing revenue crunch, government to follow tight expenditure strategy, says KM Mani

Kerala finance minister KM Mani on Wednesday said the state was not reeling under serious financial crisis, but was facing a revenue crunch.  

The financial position of the state was not 'critical' and the sharp rise in revenue and fiscal deficits was due to the general economic slowdown in the country, he informed the state Assembly. This badly hit the revenue receipts in the current financial year. However, the government intends to follow a tight expenditure strategy and proposes to explore more revenue generating avenues, he said.

Revenue deficit during the April – November period of the current financial year increased to Rs 2,309 crore and fiscal deficit edged up to Rs 4,976 crore. While revenue expenditure during the period increased 7.17 per cent, the growth in revenue receipts was below expectations at 11.96 per cent.

The finance minister said there was no point in bringing out a white paper on the economic position of the state at this juncture. As against the granted Rs 12,300-crore loan target, the state has availed loans to the tune of Rs 9,000 crore. The total debt of the state had increased by Rs 24,611.69 crore during last two years.

He said the government proposed additional revenue collection through key departments like revenue, commercial taxes, land registration and forest. The state finance ministry has already instructed these departments to explore the possibility of additional revenue mobilisation.

The proposals include introduction of 5 per cent value added tax (VAT) on textile items, 2 per cent cess on cars having a price tag of above Rs 20 lakh, 5 per cent VAT on the sale of used cars and 5 per cent tax on films.

It also proposes to hike the registration fee in land deals, by raising the fair value of land by 10 -20 per cent.

Restructuring of plantation taxes, building tax hike, increase in chitti registration fee, increase in rent of rest houses and inspection bungalows and raising fee for film shooting in forest areas are other major proposals.

According to him, the revenue recovery (RR)  proceedings would be speeded up. There would be strict control over the expenditure of the government.

New posts will not be sanctioned without the concurrence of the finance department and no department would be allowed to buy new vehicles. Hiring of vehicles would be promoted, foreign tours of government officials and ministers would be restricted, he added.

Budget on Jan 24
The state has decided to prepone the Budget presentation by one month in the light of the possible announcement of the general elections. According to the schedule announced today, the state Budget will be presented on January 24 and discussions will be held from Jan 27-29. Vote on Accounts will be on February 3, the finance minister informed.