Seeking more money to overcome the state’s financial woes, Kerala Finance Minister KN Balagopal on Sunday said the Center should have a state-specific rather than a one-size-fits-all financial approach to states as each of them has different types of development activities.
Balagopal, part of the CPI(M)-led Left Democratic Front (LDF), which is in power in the southern state for the second consecutive term, stressed that monolithic thinking about overall development is not practical and also called for flexibility in using Centrally Sponsored Schemes (CSS) depending on the requirements of the state.
Flagging serious concerns over reduced central cash transfers and borrowing restrictions, Kerala has demanded a special package of Rs 24,000 crore in the upcoming Union Budget to address the liquidity stress.
“A monolithic thinking about the overall development and governance of the country is not practical in India as different states have to be considered differently keeping in mind the overall development and unity of the country…,” he told PTI in an interview in the national capital.
According to the senior CPI(M) leader, Kerala’s share in the divisible pool fell to 1.92 per cent during the 15th Finance Commission period, compared to 3.87 per cent during the 10th Finance Commission period.
He expressed hope that the central government would look very seriously into the problems faced by the states as several state issues were very much highlighted in the election results.
In the Lok Sabha polls, the BJP-led National Democratic Alliance (NDA) returned to power for the third consecutive term, but the BJP got fewer seats than expected.
Balagopal emphasized that Kerala’s revenue management and income generation activities are among the best and the state has a very large number of social security schemes as well as a very good Panchayati Raj system.
During the period between 2020-21 and 2023-24, the state’s tax revenues rose from around Rs 47,660 crore to Rs 74,258 crore, while non-tax revenues shot up from Rs 7,327 crore to Rs 16,318 crore.
The state’s fiscal deficit also fell from Rs 20,063 crore to Rs 17,348 crore during the same period.
“The people and the government of Kerala are not affected by their own actions but by the Finance Commission’s policy of distributing income to the states,” he said. He hoped that the central government would take some positive steps specific to the state.
For Kerala, the rapidly ageing population, requiring allocation of resources for prompt elderly care, coastal erosion, disaster preparedness, flood management and human-wildlife conflict are among the critical issues.
Against this backdrop, Balagopal said the state should have the flexibility to use CSS.
The minister gave an example that when the central government planned to provide toilets in every house, the state achieved the target much earlier. “Whether we should wait even more time to get the next set of developments. Those are the issues.”
“Different states have different types of development activities, style… you cannot have a uniform deciding factor. In a country with diversity, there is a spirit of India which unites us. The difference of the state historically, traditionally that has to be kept in mind… how states have to be supported by different (approaches),” he said.
Stating the financial challenges faced by the state, Balagopal said there has been a sharp reduction in resources from the distribution pool, reduction in borrowing limits and tax issues in terms of equities following the implementation of the Goods and Services Tax (GST).
On June 27, he met Union Finance Minister Nirmala Sitharaman. While making several demands for funding, Balagopal also said in his representation that Kerala has taken prudent steps and efforts to improve its finances, especially in terms of increasing its own revenue and controlling fiscal and revenue deficits.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
First print: June 30, 2024 | 6:04 PM IST