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Fiscal policies of Centre damaging federal structure of the country: Kerala finance minister

Balagopal slammed Opposition overt protests against government, saying they were silent over the cess collected by the union government.

ByPTI

Published Feb 16, 2023 | 1:36 PM ⚊UpdatedFeb 16, 2023 | 1:36 PM

Kerala Finance Minister KN Balagopal during the press conference. (Screengrab)

Kerala Finance Minister KN Balagopal has castigated the Centre by terming its fiscal policies as ‘damaging’ to the federal structure of the country.

He also targeted the Opposition Congress-led UDF in the state over “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 Congress has been organising widespread protests across the state against the fuel cess of ₹2 imposed by the state government in the recent budget.

Addressing the media in Thiruvananthapuram on Wednesday, 15 February, 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.

Policies damaging federal structure

He claimed that 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.”

Taking on the Congress party, Balagopal recalled that in 2015-16, the then UDF government had imposed ₹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 ₹20,000 and ₹5,000 among others,” the CPI(M) leader pointed out.

Also read: Kerala government refuses to roll back cess on fuel and liquor

‘Not exorbitant’

Justifying the cess, KN Balagopal said the rise was “not exorbitant” whereas over ₹19 was being collected by the central government.

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

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

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