Kerala Finance Minister KN Balagopal has expressed hope that the Union Budget will allocate more funds for social and infrastructure development as well as correct the Centre’s fiscal policy in dealing with states.
The Left leader, who is critical of the Union government’s approach towards the states in terms of GST implementation and devolution of central funds, also said the “serious discrimination” showed towards Kerala should be stopped.
In an interview with PTI, Balagopal said the Centre’s approach has led to a financial crisis in the state that is affecting the overall development.
Union Finance Minister Nirmala Sitharaman will be announcing the Budget for 2023-24 on 1 February, at a time when global uncertainties and headwinds are impacting the Indian economy.
“As far as Kerala is concerned, there is a sharp fall in the percentage in our divisible pool. We have requested the Union government to correct it,” the minister said.
Ahead of the Union Budget, Balagopal alleged “serious discrimination” towards Kerala in allocating funds from the divisible pool.
Less than 2 percent from divisible pool
He said at the time of the 10th Finance Commission, the state’s share from the divisible pool was 3.92 percent.
“Now, at the time of the 15th Finance Commission, we are getting only 1.92 percent from the divisible pool.
There is a very serious discrimination towards us. This also leads to a financial crisis in the state. We are eligible for getting more share from the divisible pool,” Balagopal said.
He said Kerala is denied its due share citing that the state has achieved development in areas like education, health and other basic infrastructure facilities.
“Actually, we are facing second-generation problems. For developing from the existing system, we need more help,” the minister said and expressed hope that the Centre would take all this into consideration while presenting the budget on 1 February.
Balagopal said the state finance ministers during their discussion with Sitharaman have requested for extension of the GST compensation period.
“There is a systematic error in the implementation of GST. The GST compensation period should be extended,” Balagopal said.
Also read: Growing debt has brought Kerala to brink of a mega crisis
Not receiving GST compensation
He said the states had not been receiving the GST compensation since July last year. Besides this, Kerala has also urged the Union government to change the pattern of sharing GST revenue between states and the Centre.
“We have requested that the GST revenue sharing between the states and the Centre should be expanded from 50:50 to 60:40 in favour of states,” Balagopal said.
Citing the 15th Finance Commission’s observation that out of the total income in the country, 64 percent is going to the Centre and the states are receiving only 36 percent, he said this is a huge gap that needed to be addressed.
Alleging that the fiscal freedom of the states is under question due to the policies of the central government, Balagopal said it was a very serious issue and it was the duty of the central government to work on the concept of “very strong Union government and very happy state governments” under the principle of cooperative federalism.
The Kerala finance minister said more emphasis should be given to the overall development of the country in the Union Budget.
“We are expecting that some new kinds of projects will be there, which will enhance the employment opportunities and infrastructure facilities. We also hope that more fund allocation will be there for the states and more funding for supporting centrally sponsored schemes and of course new infrastructure projects and all,” Balagopal said.
Also read: GST compensation pending because of delay in AG-certified claims
Kerala needs nod for development
Balagopal said the state has placed a memorandum before the Union government seeking more infrastructure facilities including setting up of an AIIMS, industries and new institutions for more employment generation.
“We are also expecting that the Union government will give its nod to build Kerala government’s ambitious Silverline project to connect the state’s north to south through a semi-high speed rail,” he added.
The Kerala finance minister also countered the argument from certain quarters that freebies given to the people by the states should be stopped, saying “if that is a pointer, I fear that there will be further squeeze in the budgeting expenses for this.”
Noting that extending assistance to the poor and needy is a responsibility of the state, he said more funds should be allocated for the same.
“We have requested the Centre to allocate more funds for extending social security programmes like MGNREGA, food security, health and such areas,” Balagopal said.
The minister also expressed hope that the Union Budget would address the problems of NRIs who face various issues including huge air travel expenses, particularly during the festival seasons.
He said more programmes should be announced in the budget to provide jobs to the Indian citizens who were forced to return from abroad after being rendered jobless during the Covid-19 pandemic.
Balagopal also sought more assistance to the plantation sector affected by the falling prices of crops.
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