Containing deficit at 4% a challenge

Additional income mobilisation to comprise the deficit at 4% through the pandemic can be largest challenge for Finance Minister K.N. Balagopal whereas presenting his maiden Budget (revised Budget) for 2021-22 within the Assembly on June 4.

As the Finance Minister has to hold ahead the Left Democratic Front (LDF)’s purpose for a knowledge-based society with strides in fashionable employment alternatives and industrial progress and consolidate the achievements made within the social sector, the challenge is to faucet new income sources.

While implementing futuristic price range, Mr. Balagopal’s fingers can be tied because the scenario that prevailed in January is completely different now. To start with, there can be a sharp fall in Goods and Service Tax (GST) income and GST compensation shortfall remains to be a mirage for a shopper State like Kerala. Many surprising expenditure similar to pure disasters and COVID vaccine invoice will put stress on the Finance Minister.

The income shortfall, ₹8,000 crore to ₹10,000 crore, was greater than the anticipated because the financial disaster triggered by the second wave of the pandemic had come after the Budget was introduced by former Finance Minister T.M. Isaac on January 15, official sources mentioned. The 2020-2021 Budget of Dr. Isaac had offered extra expenditures of ₹1,164 crore and tax concessions of ₹191 crore towards extra income mobilisation of simply ₹200 crore, leaving a cumulative deficit of ₹1,306.69 crore.

Kerala obtained solely ₹5,700 crore final fiscal as GST compensation from the ₹1.10 lakh disbursed by the Centre as GST compensation to all States.

The cushioning impression for Mr. Balagopal is the ₹19,524 crore Revenue Deficit Grant offered by the fifteenth Finance Commission for 2021-2022.

Property tax is one space which is being eyed for mobilising income. Raising the property tax from the current 0.5 of the GDP to 1% will alone fetch ₹8,000 crore. At current, sources mentioned property tax assortment hovers round ₹1,000 crore with city our bodies contributing ₹400 crore.

In the non-tax income, the under 5% receipts within the training and well being sectors requires remedial steps. Making the reasonably priced to pay, providing good service and periodic revision would carry funds to the treasury, sources mentioned.