The Opposition, reeling out alarming fiscal figures in the Assembly on Tuesday, said Kerala was about to slip into a state of financial emergency. Finance minister T M Thomas Isaac, producing an alternative set of glowing fiscal numbers, argued there was nothing to worry.
Congress MLA V D Satheesan, while seeking leave for an adjournment motion on what he termed “Kerala's precarious fiscal situation”, accused Isaac of a series of missteps. Satheesan prefaced all his charges with French novelist Emile Zola's famous catchword 'J'Accuse...!' (I Accuse).
“I accuse the finance minister of stringent Treasury controls”. “I accuse the finance minister of increasing the public debt.” “I accuse the finance minister of inefficiency.” “I accuse the finance minister of extravagance,” he said.
Treasury controls
Satheesan said treasury controls were imposed even in the first half of the fiscal. “Welfare payments have been hit and bills for development works have been kept pending,” Satheesan said. He said bills worth nearly Rs 2,000 crore have been withheld in the six months between April and September this fiscal.
Satheesan alleged that development works had come to a standstill as a consequence. “Ongoing works have stalled after the government had stopped paying. Contractors are now refusing to take up the construction of new roads and bridges. If at all they are willing, it is only at an exorbitant cost. The tender amounts, as a result, are going vastly over the initial estimates,” Satheesan said.
The finance minister replied that treasury restrictions were only for 10 per cent of contract works, mostly for asset development works. The contractors' bills are paid according to the schedule already drawn up, Isaac said. Bills up to December, 2018 have already been paid, he said.
The finance minister also asked why plan expenditure was at all-time high if development had frozen in the state. He said the plan fund utilisation till November 18 was 49 per cent, an all-time record. Last year same time, it was only 33.9 per cent. During the last fiscal of the UDF regime, the utilisation at this point was only 30.2 per cent.
Satheesan countered this saying that Isaac had included queued up bills (bills left unpaid last fiscal) and spillover projects from the last fiscal to give the illusion of high spending. Isaac conceded that spillover projects were included in the plan expenditure but said that utilisation was as high as 87 per cent last fiscal, and in the case of local bodies it was 90 per cent. Meaning, spillover from last fiscal is responsible for only a small portion of the record utilisation this fiscal.
Excessive spending
Satheesan then accused Isaac of having no control over spending.
Isaac was not enough of a paper weight, he suggested. “If you keep a sheaf of papers under a spiralling fan without placing a paper weight on top, the papers will scatter everywhere,” Satheesan said.
He spoke of the increase in the number of people with cabinet rank, the proliferation of advisors for the chief minister and the huge pay package for government consultants. “Why would you pay Rs 10 lakh for the single visit of a virology consultant from Ireland,” he said. Public debt has increased by Rs 1 lakh crore in just a year under Isaac, Satheesan added.
The finance minister said it was true that the governm,ent expenditure was growing. “It is expanding at the rate of 16 to 17 per cent per year,” Isaac said. He took pride in this growth but also said that the former UDF government was partly responsible.
“When you left office, over Rs 1000 crore of welfare pensions were left unpaid. Not only did we clear all arrears but now pay Rs 1,200 per month to 10 lakh more beneficiaries. You call that extravagance,” Isaac asked. “We have created 8000-odd posts in the education and health sectors to streamline its functioning. You call that extravagance” . “We have completed projects that the UDF couldn't take forward. You call that extravagance,” Isaac asked.
Miserable tax collection
Satheesan's other big accusation was Isaac's failure in mobilising resources. “Right after the LDF came to power, Isaac said the UDF had failed to collect Rs 23,900 crore during its five-year period. He accused us of corruption and inefficiency,” Satheesan said. “You know how much Isaac had failed to collect in just three years? Rs 30,000 crore. Won't the very same charge of corruption and inefficiency, which he so liberally hurled at us, apply to him,” Satheesan said.
Isaac had his stock reply, something he had repeatedly announced in the Assembly this session. “The Centre has slashed our debt ceiling by Rs 6,500 crore,” the finance minister said. Further, he said the Centre was yet to pay Rs 1,600 crore which the state should have had received by the end of October by way of GST compensation.
And then putting his finger to his nose in the manner of an adult teasing a child, Isaac said: “I had thought Satheesan would speak a word about the Centre's betrayal. It is so sad he didn't do it,” Isaac said.
KIIFB and silk loin cloth
Satheesan, too, poked fun at the minister. He likened KIIFB to a silk loin cloth hung in front of a large household that had fallen on bad times. “To tell the outside world that they are still living in luxury, these upper caste families had the habit of hanging a washed silk loin cloth in front of the house. This is what is happening with the LDF government. Whenever fiscal troubles are mentioned, they hold up KIIFB as though it is their silk loin cloth,” Satheesan said.
Higher education minister K T Jaleel, who has been accused of tampering with marks, was also not spared. “Isaac's handling of finance is so poor that even 'Jaleel marks' would not save him from failure,” Satheesan said.
