Budget boons make it truly never-before one for Kerala

Thiruvananthapuram: ‘Budget like never before’ — this was how the one presented by Union Finance Minister Nirmala Sitharaman on Tuesday was touted even before its proposals were known.

Howsoever one may rate it, but for Kerala, the Union Budget was indeed different unlike those in the recent past as major proposals on infrastructure with regard to the state have been announced, though no such demands were made by the government.

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Moreover, Kerala has hit a jackpot with the centre's announcement on revenue deficit grant for bridging the gap between state governments’ revenue and expenditure.

Kerala would get Rs 19,891 crore from the Centre during the next financial year 2021-22, though the state was expecting Rs 12,000 crore next fiscal. The proposal has been included in the 15th Finance Commission report which was published on Monday.

This fiscal year the state will get a total of Rs 15,323 crore as revenue deficit grant. Kerala would get Rs 4,568 crore more in the next financial year. The money will reach Kerala's account in 12 equal instalments.

But the Commission has recommended that the grant should be reduced to 13,174 crores in 2022-23. Besides the report says that only Rs 4,749 crore should be granted in 2023-24 and nothing needs to be given in the subsequent two years.

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Fate of dozen demands

Of the 12 demands placed by Kerala before the central government, only one with regard to the Kochi Metro got accepted as per the budget announcements.

Two other demands which were not even raised were accepted even as the Finance Commission recommended a huge amount for reducing the state's revenue deficit.

Among the 12 major demands raised by the state, one on Kochi Metro was concerning infrastructure development. The rest were proposals for the development of different sectors and for increasing the state's revenue.

The new road corridor announced by the finance minister could be the development of the existing national highway. Under the current circumstances, only widening of roads and construction of elevated highways are practical in Kerala. Constructing anew road corridor after acquiring land is next to impossible.

The state did not place any special demand for the development of the fishing harbour in Kochi. Nor was any demand made for a special package for sustaining Kochi Metro which is running in huge losses.

Though the state government had sought free Covid vaccine distribution, the Centre had announced the same for the whole country even before the budget presentation.

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Unmet demands

The following demands of the state government was given the short shrift by the centre.

Increasing the borrowing limit of the state to more than 3 per cent of the GDP.

The ways and means advances from the Reserve Bank of India should be continued. (This facility under its credit policy enables states to tide over temporary mismatches in the cash flow of their receipts and payments.)

Performance grant of Rs 660 cr sanctioned by finance commission to local bodies should be released soon.

Increasing the centre's share in welfare pension. Of the Rs 1,600 given as monthly pension to vulnerable sections by the state, the centre provides Rs 300 to Rs 500.

Interest assistance scheme and insurance scheme should be sanctioned for the tourism sector which is facing a crisis following the Covid-19 pandemic.

Price stability plan should be announced for commercial plantation corps.

The existing Central share being received by states should be increased from 32 per cent to 42 per cent.

The Sales Tax Act should be amended so that traders who buy huge quantities of products which do not come within the purview of the GST from outside the state benefit.

The Central GST department should stop issuing notices making GST applicable for the contracts being given by the government.

Micro, small and intermediate entrepreneurs are not getting loans because of their liabilities. The centre should address this problem.

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