The Union Budget for 2020-21 is a big setback for Kerala and the intention of the Centre is to wage war against the State, Finance Minister T.M. Thomas Isaac has said.
“The State has been neglected and the Union Budget is disappointing. The share of Central tax that was ₹17,872 crore in 2019-20 has been reduced to ₹15,236 crore as Kerala’s share has been reduced from 2.5% to 1.9% based on the 15th Finance Commission report. We were expecting a share of ₹20,000 crore,” Dr. Isaac said at a press conference here on Saturday.
Dr. Isaac, who is preparing the State Budget to be presented on February 7, said mobilising additional resources would be a big challenge for him. Pointing out that the State was yet to access the commission report cited in the Union Budget, Dr. Isaac said the only hope was on revenue deficit grant.
The commission had also reduced the share of States in the divisible pool of Central taxes by one percentage point to 41% in view of the change in status of Jammu and Kashmir to two Union Territories. While the Centre’s deficit had been pegged at 5%, it had not bothered to increase the deficit of the States even by 0.5%. “The intention is to prevent taking loans from the consolidated fund.”
Demands ignored
The demands raised by the State like rubber subsidy, increase in pension of senior citizens, takeover of public sector undertakings, and new projects had been ignored. The Union Minister had not learnt from last year’s budget and the 2020-21 budget was silent on the economic slowdown.
“The budget has stated that economic growth will be reduced to 4.9% in the current year. But, Ms. Nirmala Seetharaman has concealed the economic slowdown that will lead to it,” he said.
Instead of collecting ₹7.6 lakh core as corporate tax, only ₹6.1 lakh crore had been collected. Corporates were getting huge tax concessions but investment had not gone up. Dr. Isaac said the policy of the Centre was to sell PSUs to these corporates. Income tax had been made complex with exemptions instead of simplifying it.
The Union Finance Minister had not heeded to the unanimous request of State Finance Ministers to increase the purchasing power of the people.
The outlay for the employment guarantee scheme and women empowerment had been reduced. Outlay for health and education missions and rural development had not gone up. The outlay for anganwadis had gone up only by 3%.
