Transport Minister Aryadan Mohammed on Tuesday lamented the tendency of the State Cabinet to regularly sanction out-of-budget expenses for various purposes.
“We have very few Cabinet meetings in which no out-of-budget expenses are sanctioned. What is the purpose of the budget then,” he asked. He was addressing a seminar organised by the Rajiv Gandhi Institute for Development Studies here.
The seminar was to discuss the points the State should argue before the 14th Finance Commission, which had scheduled an interaction with the State government and political parties here on Wednesday as part of the consultative process prior to fixing its award for each State in the country.
Mr. Aryadan said he was sorry his departments too were no exception (in claiming unbudgeted funds from the government). Budget discipline had taken a tumble. He quoted figures to give his assessment that the revenue deficit and the fiscal deficit were of late slipping into deeper areas in Kerala.
He said it was also necessary to examine why tax collection was not up to expectations of late. Consumer spending in Kerala had not been hit by economic slowdown since the foreign remittances had actually shot up due to rupee devaluation and the families who received the remittances were spending more than what they were before.
Like several of the other States, Kerala too had the demand that a higher share of the Central taxes than at present should be divided among the States, he said.
KPCC president Ramesh Chennithala, who inaugurated the seminar, said that Kerala’s share of the divisible pool of the Central taxes had come down progressively from the level of 3.05 per cent under the award of the 11 Finance Commission to 2.34 per cent under the award of the 13 Finance Commission.
The indices followed by successive Finance Commissions’ in determining each State’s entitlement had worked to the disadvantage of Kerala.
He said the KPCC would urge the 14 Finance Commission to take a relook at the indices and also consider some of the issues particular to Kerala (the need to support an aging population, the challenge of rehabilitating a large number of expatriate workers returning jobless and the ordeal of taking education and health sectors to the next phase of development), while determining its award.