The Hindu : Kerala / Thiruvananthapuram News : Steps to increase revenue collection

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Thursday, Aug 24, 2006

Kerala

Kerala - Thiruvananthapuram

Steps to increase revenue collection

Special Correspondent

Measures include hike in service fees, lease rents

THIRUVANANTHAPURAM: The Cabinet on Wednesday resolved to take a number of measures, including hike in service fees, lease rents and stepping up of revenue collection, to tide over the Government's financial difficulties.

The Ministers presented proposals from their departments to shore up revenues to make up for an expected shortfall in revenue receipts this year. These proposals would now be processed at the level of secretaries and comprehensive proposals put up for approval of the Cabinet next time, Chief Minister V. S. Achuthanandan said after the Cabinet meeting.

The Cabinet also decided to step up its campaign against the fiscal policies of the Central Government that harmed the interests of the States.

Finance Minister Thomas Isaac told mediapersons that a shortfall of Rs.1,000 crore was expected in revenue receipts this financial year against receipts estimated in the Revised Budget for the year. The expenditure was going up while the revenues were not increasing as expected.

The Government proposed to step up revenue recovery. An annual target of Rs.500 crore would be set for collection of revenue arrears. Now the collection of arrears was only of Rs.62 crore a year against total arrears of Rs.3,000 crore. Of the arrears, Rs.1,500 crore was that of the public sector units, which could not be realised easily.

Dr. Isaac said the Government would desist from issuing stays on revenue collection except in case of the poor. Existing stays on revenues due from distilleries and cashew factories would be vacated. The High Court would be urged to set up a special bench so that court stays on revenue collection could be vacated faster.

Land value

He said the Revenue Department would take steps to fix fair value of land and revise stamp duty suitably. Arrangements for collection of property tax on the basis of plinth area were being finalised.

He said the State would campaign against anti-people fiscal policies of the Centre at the forthcoming meeting of the State Finance Ministers and other fora. The Centre had agreed to restore the borrowing limit of the State. However, it had specified that debt waivers and interest concessions totalling Rs.220 crore would not be provided as the State had failed to keep the fiscal deficit under check.

Fiscal deficit

The fiscal deficit of the State was Rs.6.4 per cent against four per cent specified in the Fiscal Responsibility Act. The Centre had also communicated to the Chief Minister that the State's share of small savings would be less by Rs.1250 crore this year.

He said that it was important for the State to use funds for the welfare of the people instead of sticking to targets fixed by someone. Various States had a balance of

Rs.62,000 crore in the treasury and this was the result of pressure applied by the Centre for its benefit. Those were funds borrowed from the Centre at 9 per cent interest. The Kerala Government did not propose to keep any balance in the treasury, as ways and means advance would cost only 5 per cent. It was not good fiscal management to keep balances in the treasury instead of using it for the welfare of the people.

He noted that Rs.1,300 crore was due to the contractors and at least Rs.300 crore of this was to be cleared during the Onam season. The arrears in payment of welfare pensions amounted to Rs.750 crore.

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