THIRUVANANTHAPURAM: Finance Minister T.M. Thomas Isaac has said that signs of the economic crisis affecting the State’s tax revenue are already in evidence with stamp duty collections showing a fall for the first time in recent times and motor vehicle tax collection falling by Rs.40 crore in October.
Addressing a seminar on “Global financial crisis and its impact on India,” organised by the AKG Centre for Research and Studies here on Tuesday, Dr. Isaac said that despite the likely adverse impact of the crisis, the State’s tax collection during this year would be better than that last year as the government had already collected half the targeted amount.
For the long haul
The State would still have to brace up for the long haul marked by fall in its overall revenue.
Dr. Isaac said that though the State was handicapped by the Centre’s refusal to permit it to raise loans from different sources, it was determined to increase investment in the infrastructure sector and on welfare programmes. The account books of major public utilities were being cleaned up and they were being encouraged to raise resources from wherever possible. However, private entrepreneurs were faced with credit crunch because the banks were not as liberal with credit as before, he added.
Recalling how the government of the erstwhile Travancore State had tried to tackle the Great Depression of the 1930s, the Finance Minister said there were interesting similarities between the situation then and now. One of the most significant events of the time was the clamour for dumping the government’s policy of having surplus budgets and to go in for deficit financing and greater public spending to tide over the difficult situation.