The LDF government’s emphasis on spurring economic activity and welfare-oriented measures will be reflected in the 2023-24 State Budget as well, Finance Minister K. N. Balagopal said on Friday.
Amid speculation that steep tax hikes are in the offing, Mr. Balagopal, in a pre-budget chat with The Hindu, indicated at hikes that are par for the course.
‘‘With the introduction of the Goods and Services Tax (GST), we do have limitations in increasing the taxes excessively,’‘ he said. At the same time, he underlined the need for ‘‘timely revisions’‘ in certain areas, for example service charges that have not seen any hike in decades.
Mr. Balagopal is scheduled to present the State budget for the 2023-24 fiscal on February 3. Revenue mobilisation is expected to be high on the agenda this time.
Mr. Balagopal maintained that Kerala will be deprived of around ₹24,000 crore this fiscal due to the discontinuation of GST compensation, dip in revenue deficit grant and reductions owing to the Centre’s treatment of ‘off-Budget’ borrowings through the Kerala Infrastructure Investment Fund Board (KIIFB) as direct State debt.
‘’With the introduction of GST, we have lost much of our taxation rights, except for items such as liquor and petroleum. Even hikes within that small space will generate only a small portion of what is needed,’‘ he said.
The Budget will have measures for taking forward the growth in core sectors such as agriculture and industry, he said. Stress will be laid on the use of modern technology in these sectors, thereby increasing economic activity and revenue generation. ‘‘Previous Budget put thrust on it. Such measures will be continued,’‘ he said.
The Central government’s stand on KIIFB places difficulties in the State’s path, but the State hopes to overcome it as KIIFB is important for the State’s future, he said.
KIIFB has sanctioned 993 projects with a total outlay of ₹ 73,908 crore. ‘‘The Centre’s stand affects our plan space. The Chief Minister has written to Prime Minister Narendra Modi on this and we have also received legal opinion that the Centre’s stand is incorrect. We hope that they will correct it,’‘ Mr. Balagopal said.
Budget 2023-24 will also reflect the LDF government’s emphasis on social welfare measures, he said. ‘‘The Kerala economy is known for its stress on public welfare; Good schools, good hospitals, and good infrastructure. This government will continue to lay stress on this aspect,’‘ he said.