Fiscal policies of Centre damaging country's federal structure, says Finance Minister KN Balagopal 

2 min read
Read later

KN Balagopal | Photo: Mathrubhumi

Thiruvananthapuram: Kerala Finance Minister K N Balagopal on Wednesday lashed out at the Union government by terming the Centre's fiscal policies as damaging to the federal structure of the country.

Balagopal also hit out at the opposition Congress-led UDF in Kerala for staging "unprecedented protests" against the Left government over the imposition of cess on fuel prices saying they were silent over the cess collected by the Union government.

The opposition Congress has been organising widespread protests across the state against the fuel cess of Rs 2 imposed by the state government in the recent budget.

Addressing the media here, Balagopal said this was not the first time a cess was proposed in the budget.

"We have not received the GST compensation since June last year. The Centre has reduced the tax but its benefit was not going to the consumers but to huge corporate companies. I would like to reiterate that today the state governments in this country do not even have the power of panchayats," Balagopal said.

He claimed the fiscal policies were damaging the federal structure of the country.

"States have a federal authority but that authority of the state governments has been curtailed and they took away the control over tax collection," Balagopal added.

Attacking the Congress party, Balagopal pointed out that in 2015-16, the then UDF government imposed Rs 1 as cess on fuel prices.

"Similarly, this cess was imposed for social security seed fund purposes. We need to look at the situation of the state. Last two times, we did not impose any major tax due to the pandemic but announced packages of Rs 20,000 and Rs 5,000 among others," the CPI(M) leader said.

He said such packages helped the state's economy to grow to 12 per cent after recording negative growth.

Justifying the cess, Balagopal said the rise was "not exorbitant" whereas over Rs 19 was being collected by the Union government.

The government has said the social security cess on Indian Made Foreign Liquor (IMFL) and on the sale of petrol and diesel were part of its commitment to continue protecting the lives of vulnerable sections of society by supplementing financial resources.

An additional revenue of Rs 400 crore is expected through the social security cess on each bottle of IMFL while an additional revenue of Rs 750 crore is expected from the cess on sale of petrol and diesel at the rate of Rs 2 per litre.


Add Comment
Related Topics

Get daily updates from

Disclaimer: Kindly avoid objectionable, derogatory, unlawful and lewd comments, while responding to reports. Such comments are punishable under cyber laws. Please keep away from personal attacks. The opinions expressed here are the personal opinions of readers and not that of Mathrubhumi.