The Kerala government will decide on follow-up actions on the observations made by the Comptroller and Auditor General of India (CAG) in its recent report, after a detailed examination by Assembly committees and other departments, Finance Minister KN Balagopal said on Friday, 15 September.
It is the constitutional responsibility of the Accountant General to carry out audits of the state’s finances and submit its observations, the minister said. However, he rejected reports in certain quarters that raised concerns about the government’s failure to collect tax arrears. He termed such reports “baseless”.
Finance Minister defends state
“As per the CAG report, in the financial year that ended on 31 March 2022, the total revenue deficit of the state is ₹28,258.39 crore. This deficit has been carried over from departments like GST, Kerala State Electricity Board, registration, and police for several years. Previous audit reports have clearly mentioned it,” Balagopal said in a statement.
The Compliance Audit Report of the CAG on the state’s revenue sector for the year 2021-22 was tabled in the state Assembly on Thursday.
As per the report, for the 2020-21 financial year, Kerala’s revenue deficit was ₹21,798 crore, and the same rose by ₹6,400 crore in 2021-22.
“The fact is that, unlike the previous reports, a new item has been added to the revenue deficit. That is, by calculating the accumulated interest on loans given to public sector undertakings like KSRTC, Housing Board, and Kerala Water Authority from 1970 onwards. This alone accounts for about ₹5,980 crore,” Balagopal said.
Also Read: Kerala’s revenue collection in 2021-22 decreased by 10%: CAG report
Reduction in tax arrears
Justifying the measures taken by the government, the minister said that there is a reduction of ₹420 crore this year from last year’s tax arrears that the tax department was supposed to collect.
“Usually, the deficits in tax departments never come down, but only increase. But this year, there is a reduction of ₹420 crore in tax deficits, compared to the tax deficits during the last financial year. This is a historical achievement,” Balagopal said.
According to the CAG report, the tax deficit for 2021-22 is ₹13,410.12 crore.
Kerala could collect about ₹258 crore of the total amount and around ₹987 crore was further reduced through the disposal of appeals and amnesty, the minister said.
Further, he said that ₹12,900 crore out of the ₹13,410 crore was assessed earlier as part of the laws that existed before the implementation of GST and ₹5,200 crore pertained to money stuck due to different stay orders. An amount of ₹6,300 crore is part of various revenue recoveries.
Also Read: LDF govt blames Centre for Kerala’s financial crisis
About the observations of the CAG on the social security pension issue, Balagopal said that the mustering and life certificate production were temporarily stalled during the Covid-19 period and some issues caused by this are now being resolved.
“We could effectively eliminate (from the list of beneficiaries) the names of deceased persons and also duplicate entries, by connecting their identity cards with Aadhaar, and through mustering till 31 August 2023,” Balagopal said.
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