Financial imprudence blamed for increased strain on Kerala’s resources

The absence of a scientific mechanism to monitor the receipt of Central funds and the failure to secure timely reimbursement of funds expended for Centrally sponsored schemes are reportedly increasing the strain on the State’s finances.

Official sources told The Hindu here on Thursday that the Finance Department had no system to find out whether its due share of Central taxes was being received every year. Similarly, substantial sums were being expended by the State government to execute various Central schemes.

The State would have to furnish its claims and statements to get the funds reimbursed from the Centre. There had been an inordinate delay in submitting the claims even when the State is passing through a very difficult phase, sources said. This financial imprudence had cost the State dear, they said.

Progressive decline

The progressive decline in the Central transfer of tax share and grant-in-aid to the State was another issue. The Kerala Public Expenditure Review Committee had expressed concern over the fall in the share of Central tax transfer since the Tenth Finance Commission.

The committee had pointed out that the financial commitments of the State was growing over the years due to a variety of reasons such as increase in cost of urbanisation, lifestyle diseases, educated unemployment, and such others.

The laxity in submitting project proposals had come in the way of optimum utilisation of the State-specific and other Central grants, sources said. The proposal to set up a special taskforce to prepare feasible schemes and projects for optimum absorption of Central funds had not been taken up seriously. The constitution of an exclusive cell in the Finance Department had been prescribed to ensure reimbursements in the case of Centrally sponsored schemes, sources said.

This could have helped streamline the release and utilisation of the funds. Even while striving hard to find means to meet routine expenses, the Finance Department had chosen to ignore such crucial aspects, they added.

More In: Kerala | National