Kerala finance minister T.M. Thomas Isaac. File photoFinance minister T.M. Thomas Isaac has set a lofty goal for the department. He wants tax collection to grow at a 20 percent rate to enable the Left Democratic Front government to go forward with the planned development and welfare activities. The minister talks to Onmanorama on the journey so far and the road ahead.
How did the Finance Department fare when the Left Democratic Front came to power a year ago?
Growth in tax collection had slowed down to less than 10 percent during the term of the United Democratic Front government. The growth was about 20 percent during the term of the previous Left Democratic Front government. We were presented with a situation where we were not even able to bridge the revenue deficit with the permissible credit limit. Nothing was in order. Our challenge was to find a way to move forward. We were clear about one thing. The government was not going for an austere drive. The government had immediate liabilities of Rs 8,000 crore. We had to pay Rs 3,000 crore as welfare pension and Rs 1,500 crore for payment towards construction activities. We needed a source of revenue to honor these commitments.
An immediate spike in revenue was out of the question. We targeted higher tax collection. However, the demonetization drive by the central government came as a setback. Own tax revenue increased but fell short of our expectations.
What were the changes you have brought about in the department?
The government decided not to put curbs on the expenditure towards development and welfare programs even though there was a financial crunch. The government disbursed Rs 5,100 crore as welfare pension to 48 lakh people. We paid half of the dues to contractors for road works completed. We are trying to pay the entire amount. The pay revision announced by the previous government was another liability. We needed Rs 1,400 crore for pay revision and Rs 900 crore for pension revision. We have paid it.
The government will spend Rs 600 crore for education loans this financial year. The government has set aside more money for traditional industries. If the previous government had allotted Rs 50 crore, this government has already disbursed Rs 125 crore. The government has created about 20,000 vacancies in various departments including health and the police. We have to deal with the higher secondary sector now. The plan expenditure is 83 percent and this is 15 percent above the average of the last five years.
The government has approved works of Rs 12,000 crore through the Kerala Infrastructure Investment Fund Board (KIIFB). They are at the tendering stage. The government has announced programs worth Rs 45,000 crore since coming to power.
What are the plans for the next four years?
The effective implementation of the Goods and Services Act is a challenge. We are also on a mission to complete the works taken up through the KIIFB. We had to make a lot of changes to bring in the GST, including changes to the servers. The GST is a new administrative order. We are a bit anxious about how to implement it and what results to expect. We are hopeful at the same time. We had to go through a struggle to make many elements in the GST regime favorable to the state.
The government intends to achieve 20 percent growth in tax collection. If we are able to collect more taxes, we could implement more projects in the traditional sector. We could improve hospitals and schools. Pension and dearness allowance dues may not mount anymore. Contractors could be paid on time. The KIIFB will be the launch pad of our development.
What about the measures taken to fast-track the movement of files?
The Finance Department never had pendency of files as a problem. We do not have a single paper. Everything is e-filed. We have sent out certain directions in this regards. The officer concerned can take a suitable decision whenever he receives a file from another department. The additional secretary can take decisions in many cases. He can consult his colleagues in his office in case of doubts. There is no need to send a file back. Officers have also been instructed not to worry about money while approving projects. The government will ensure the availability of money as and when the projects proceed.
