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Kerala finance minister KN Balagopal
Thiruvananthapuram: Finance Minister KN Balagopal will be looking to find practical solutions when he presents the state budget on Friday. The budget would likely answer the measures to be taken by the state government in the next fiscal year to revive the cash strapped economy. The public will be less surprised if no significant projects or schemes are introduced.
The state government is desperate to generate revenue to offset a looming economic catastrophe. The revenue generation and fiscal deficits are beyond expected levels. Further, Rs 19,800 crore provided by the centre to tackle this financial burden is already decreased to Rs 13,000 crore this year. Additionally, the GST compensation provided by the central government to the states will considerably reduce after May 31.
Altogether, the state expects a loss of around Rs 15,800 crore in the upcoming year. Apart from this, the economic challenges posed by the Russia-Ukraine war, financial burden due to the K-Rail project, industrial corridor, and other projects would be a great challenge for the government.
It is still unclear how the state government will find ways to pay off the additional expense incurred due to the hike in salary of the government employees.
However, the state is expected to see a 10 per cent increase in tax revenue. The state would be forced to cut unnecessary expenses and increase production.
The short-term target of the Finance Ministry is to increase production by Rs 25,000 crores per annum by implementing reforms in the agricultural and industrial sectors. In the second phase, there will be a target of Rs 1 lakh crore per annum of additional production.
Meanwhile, the assessment is that the state will have to raise taxes in various sectors. There was no tax increase in the last budget. However, it is not clear which sector would see an increase in taxation.
The government had aimed to reorganize the tax department to intensify tax collection and prevent violations. Further, measures would be taken to collect GST properly.
The private sector is carrying out the construction work at a low cost. The same methodology would be implemented in public works, with the Public Works Department and government agencies working together.
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