Give Rs 15,323 crore to Kerala from central kitty: Finance Commission

Indian rupee
Photo | Reuters

New Delhi: The hopes of Kerala government to tide over its revenue shortfall now rests on future disbursal of a share from the central tax receipts. The 15th Finance Commission has recommended to the Union government that Kerala be given Rs 15,323 crore out of its tax revenues to meet the latter's estimated revenue deficit for the financial year 2020-21.

The Commission proposed giving 1.943 per cent of the central tax revenue to the state. This share would come up to Rs 16,616 crore. Even if this amount is received, Rs 15,323 crore alone is required to bridge the revenue deficit in the current financial year.

The panel also estimates that Kerala would face Rs 31,939 crore revenue deficit in the next financial year.

(Revenue deficit refers to the shortfall in net income when compared to the estimated net income.)

Fourteen states, including Kerala, would face revenue deficit even if they get the Centre's shares, the Commission stated in its report.

Other proposals

The Finance Commission has also recommended special aid for garbage disposal and water distribution projects in cities with more than 10 lakh population. Kannur, Kochi, Kozhikode, Malappuram, Thiruvananthapuram and Thrissur fall into this category.

The Ministry of Housing and Urban Affairs and the Ministry of Environment need to give nod to allot money for cities with more than 10 lakh population.

Other cities/town be allotted funds in two phases in next June and October, the Commission suggested.

A recommendation has also been made to allot grants in 50:50 ratio for local self-government bodies at the district, block, and panchayat levels for basic needs and specific projects.

Accordingly, rural local bodies should get Rs 1,628 crore and urban local bodies Rs 784 crore.

However, the money allotted for local bodies need to be used for the development of the respective regions and not for expenses such as those on salary.

The money handed down by the centre to the state government should be given to the local bodies within 10 working days. If the money transfer to local bodies is delayed, then interest rates charged for development loans in the market would be levied.

Grants for cities with 10-lakh population

Kannur: Rs 46 crore

Kochi: Rs 56 crore

Kollam: Rs 31 crore

Kozhikode: Rs 57 crore

Malappuram: Rs 47 crore

Thrissur: Rs 52 crore

Thiruvananthapuram: Rs 47 crore

Total: Rs 399 crore. (This is part of the fund of Rs 784 crore allotted to the urban local bodies.)

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