Hello and welcome to Onmanorama podcasts, You are listening to Ajish George and in this episode, we will look at what to expect from Finance Minister KN Balagopal's first budget presentation in Kerala Assembly on Friday.
Balagopal has taken over the difficult task of financial allocations at a time when the economic environment is the most unfriendly ever due to the COVID-19 pandemic in Kerala’s history and people’s expectations are high, they want the government's welfare measures to continue.
With the second Pinarayi Vijayan-led government following the policies and development outlook of the previous government, Balagopal’s announcements will be the continuation of former Finance Minister Thomas Isaac’s Budget.
The agricultural sector was badly affected by the untimely rains and some support for them is very much likely in the budget.
The LDF manifesto had promised to increase the floor price of rubber to Rs 250 a kilogram in a phased manner. The rubber farmers had earlier presented a memorandum to the government, requesting it to hike the price. The farmers are hoping that the poll promise will reflect in the Budget. Increasing the price to Rs 250 will boost the market, besides bringing back those who have quit tapping.
In terms of taxes, there are indications that the government may relax the basic duty for importing vegetable oils. But, some other taxes are likely to be increased to generate more revenues.
The State has the power to alter the tax on fuel, liquor, motor vehicles, buildings and land, and it is likely to impose an additional COVID-19 cess on liquor to help tide over the economic crises.
With the lockdown shutting down liquor outlets and bars, Kerala has been losing Rs 1,000 crore a month from the sale of alcoholic beverages.
Balagopal is also likely to announce a 10 per cent hike in property tax, making land registration more expensive.
The Budget may also propose an increase in fees for services from all government institutions, including schools and hospitals. The hike may be in the range of five to 15 per cent.
The Finance Minister is also certain to earmark an allocation for providing a free COVID-19 vaccine.
As in the past, the Kerala Infrastructure Investment Fund Board or KIIFB will be utilised for infrastructure development.
However, the COVID-19 pandemic and the resultant lockdown has thrown their share of challenges in front of Balagopal.
The state's Domestic Product at the end of March 2021 was 3.82% lower than the previous year. Unless the lockdown is lifted, there is no likelihood of economic growth.
Another major concern is the return of Non-Resident Keralites. More than 2.5 lakh people have returned from abroad after Covid started to spread globally. Schemes providing support to them in finding meaningful commercial activities in Kerala will be a big plus for the government.
With the coastal people facing the wrath of the sea every monsoon season, Balagopal is likely to announce a comprehensive package to prevent sea erosion. Chief Minister Pinarayi Vijayan had also hinted towards this in the Assembly.
Balagopal's Budget speech will begin at 9 am on Friday and we could see how he balances the revenue generation and spending amid challenges of coronavirus spread, lockdown, monsoon and sea erosion.
You are listening to Ajish George. For more Kerala Budget related coverage, keep listening to Onmanorama.
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