Thiruvananthapuram: Finance Minister K N Balagopal gave priority treatment to public health in his maiden Budget tabled in the State Assembly on Friday, proposing a Rs 2,000 crore package for the prevention and treatment of COVID-19.
Shunning attempts to bridge the yawning gap between revenue and expenditure, the Budget reflected the government’s resolve to fight the pandemic, even by availing loans.
Balagopal created the impression that the various Rs 29,027 projects, his predecessor T M Thomas Isaac had announced on January 15, could not be implemented. The finance minister earmarked just Rs 29,060 crore for rolling out the projects.
Further, he announced new projects, including a Rs 20,000 crore coastal plan, raising doubts over the possibility of implementing Rs 30,000 crore projects with an additional allocation of merely Rs 33 crore.
The trick the finance minister may pull out is clear. No one keeps track of the implementation of projects announced in the Budget, but the government may lay claim for those that were rolled out. The next Budget could include the holdovers, such as the coastal protection plan announced on Friday.
Bringing several projects under the non-plan expenditure head, too, will help in keeping plan expenditure under check. Announcing continuing projects will also check additional expenditure.
Political decision nixed tax hike
Despite strong bureaucratic recommendations, the government took a political decision against increasing taxes. The decision was made to avoid placing an extra burden on the public, already bogged down by the pandemic. The government felt that an increase in taxes may spark widespread protests.
The government has been mulling over increasing the tax on alcoholic beverages and the fair price of land in the first Budget after the COVID-19 crisis. Finance Minister Balagopal confirmed the plan in his post-Budget media interviews.
Diverting the MLA funds to the health sector will provide relief to the State exchequer. The Central government had earlier diverted the MPs’ funds to COVID care.
State to borrow Rs 30,697 crore
The Budget is anticipating a decrease of Rs 1,287 crore in tax revenues and Rs 500 crore in non-tax revenues, more than what Isaac had anticipated. But the Central tax share and grant will increase to Rs 4,392 crore, up Rs 2,605 from the previous Budget.
The fiscal deficit has been maintained at 3.5 per cent, and the Budget has not announced any change in the plan to borrow Rs 30,697 crore.
Expected announcements on hold
Balagopal’s Budget was mum on several widely much-anticipated plans, such as pension for housewives. The plan was one among the prominent promises the Left Democratic Front had made in its election manifesto.
An announcement in the plan was expected in the first Budget of the second Pinarayi Vijayan-led government, considering the longer period needed for its implementation. Additionally, the Budget did not clarify on the continuation of distribution of free food kits.
