Rs 115cr Deficit In Kerala Budget Left Uncovered Deficit Budget

Kerala finance minister T Sivadasa Menon yesterday presented a Rs 115.73 crore deficit budget for 1998-99 in the state assembly.

In the third budget of the Left Democratic Front government, the finance minister also proposed additional resource mobilisation measures to net Rs 317 crore. However, the deficit was left uncovered by the finance minister, who said he was confident of making up the gap through economy measures and better management.

Menon, who presented a vote on account, proposed entry tax for items including computers, components and spares, photocopier, fax machine, generators, furnace oil, high speed diesel, and 50 per cent increase in motor vehicle tax for private cars and jeeps.

 

The minister anticipated an additional revenue of Rs 60 crore from sales tax administrative reforms and an additional non-tax revenue of Rs 100 crore through implementation of proposals submitted by a committee under the chairmanship of the chief secretary.

Menon proposed an increases in the tax rate for arecanut, bicycles, watches, clocks, time pieces, granite metals and pepper, ready made garments and hosiery goods, toys and aviation and turbine fuels, but lowered the tax on coconut products and tamarind.

He raised the basic land tax (per acre) from 50 paise to Rs 1 for panchayats, from Rs 1 to Rs 2 for municipalities and from Rs 2 to Rs 4 for corporations with the minimum payable fixed at Rs 5, Rs 7.50 and Rs 10 respectively in the areas concerned, which would lead to an additional revenue of Rs 25 crore.

Stating that the government would continue supporting the agricultural sector, Menon announced concessions and new schemes for development of paddy and coconut. To help rubber growers, he lowered the rates of compounded tax payable on rubber under the Kerala agricultural income tax in view of the sharp fall in the prices of natural rubber. To promote coconut-based industries, the tax on coconut products would be lowered to four per cent from the existing 10 per cent. The rate of agricultural income tax for domestic companies would be reduced from 65 per cent to 60 per cent, he added.

The finance minister also said the government would set up a specialised financial institution for reviving the public sector units with corpus of Rs 30 crore.

The additional amount required would be mobilised by raising non-SLR bonds, he said, adding that Rs 25 crore would be set aside for power subsidy to industries.

Among the welfare schemes announced were a welfare fund for workers under the Shops and Commercial Establishment Act, a housing scheme for cashew workers and increase in government contribution for toddy workers pension scheme from 7.5 per cent to 10 per cent. The grant for traditional vaidyas would be raised to Rs 600.

Menon announced the sanctioning of one instalment of dearness allowance due to government employees effective from July 1997 saying that it would be released along with the salary for March.

The liability of government employees who died while in service would be waived up to a maximum of Rs 2 lakh.

A scheme would be introduced for imparting private tuition to SC/ST students in the SSLC examination as their pass percentage now was very low.

A housing project for government employees would be taken up in Thiruvananthapuram. Hostels for government employees would be constructed at district headquarters of Idukki and Wayanad.

Cooperative medical stores would be opened in all taluks attached to the taluk hospitals. In all 100 cooperative medical stores would be opened. A government unit would be set up in the cooperative sector and a modern rice mill at Thathtamangalm, also in the cooperative sector.

For the rice mill the finance minister provides Rs 2 crore in the budget.

Menon said the LDF government would make every earnest effort to develop the state into a software valley.

Opposition piqued

The UDF Opposition in the Kerala state assembly has termed the budget as a status quo budget, which cares nothing for the development of the state. Opposition leader A K Antony said the budget has neglected development in all sectors. The finance minister never mentioned any step to solve the unemployment problem, as also problems faced by the farmers, he said. The finance minister himself had admitted that the farmers had to suffer a loss of Rs 1,000 crore due to the fall in prices of agricultural products and had only declared a relief of Rs 60 lakh for them, Antony said, adding that the real loss of the farmers was around Rs 2,500 crore. IUML leader P K Kunhalikutty said the budget had no proposals to solve the economic crisis faced by the state. On the contrary, it would only aggravate crisis, he said. KC-M leader, K M Mani, said finance minister was a total failure in finance management, as the revenue deficit had increased by Rs 500 crore, since the present LDF government assumed office. KC-Jacob

leader T M Jacob pointed out that the finance minister could not announce the completion of any projects, declared by him in his previous two budget speeches. l Press Trust of India

Kerala finance minister T Sivadasa Menon painted a bleak picture of the state economy, which, he said, was suffering from a combination of factors like crash in cash crop prices, spurt in repatriation of overseas workers and slump in real estate market.

According to Menon, the loss of income due to the fall in prices of farm produce would be over Rs 1,000 crore during the past year. A large number of overseas Keralites had to return during the year which had adversely affected inflow of remittances, and the end of the boom in real estate market had also resulted in lower investments in construction activities. All these have, in one way or the other, resulted in reduced economic activity in the state, affecting the income of the population, Menon observed.