No crisis, only crunch: Mani

Mr. Mani said the rate of growth of tax collection remained at 12 per cent, ahead of the national average of 10.5 per cent.

Finance Minister K.M. Mani on Friday said while the State was not facing any financial crisis, it was experiencing a fiscal crunch on account of increasing demands.

In what appears to be one of the early pre-budget interactions with the media, he said revenue collection had registered an increase of 16 per cent. However, this was lower than the expected rate of growth.

One of the main reasons for the low rate of growth could be attributed to the fall in revenue from the sale of liquor, which had come down to 12 from the expected 20 per cent.

Fall in exchange rate

The slump in the automobile and construction sectors had impacted the revenue. The fall in the exchange rate of rupee had also contributed to the general downward trend, he said.

“In spite of such mixed trends, the economy is on the whole passing through a comfortable stage. All dues with regard to social security pensions till September have been cleared, contractors’ bills till June paid, and there are no dues towards wages or dearness allowances. Above all, the State has steered cleared of overdraft so far,” he said.

Mr. Mani said the rate of growth of tax collection remained at 12 per cent, ahead of the national average of 10.5 per cent.

Action plan

He expressed hope that the rate could improve as the government had asked officials to expedite the settlement of files with pending dues.

The pending cases of Kerala Government Sales Tax (KGST) and Central Sales Tax (CST) would be disposed of by January, he said. “Steps have been initiated to prevent tax evasion at check-posts.” The pending revenue recovery cases would be expedited and up to 50 per cent of the dues would be levied, he said.

Mr. Mani said the government had allowed stay for dues to the tune of Rs. 372 crore while the courts allowed stay on cases to the tune of Rs.1,057 crore.

However, the government had not allowed any absolute stay, he said and added that all complainants had to pay 30 per cent of their dues to receive the government stay order. Mr. Mani said one of the reasons for the financial crunch could be the large amounts earmarked for mega projects.