Finance Minister K.N. Balagopal on Friday announced a string of tax increases and new cesses aimed at mopping up additional revenue in his Budget for the 2023-24 fiscal, even as the measures drew sharp criticism for burdening taxpayers at one fell swoop.
The Budget also earmarked ₹2000 crore for tackling inflation and ₹100 crore for a ‘Make in Kerala’ programme intended to promote local industry and self-reliance.
Petrol, diesel and liquor will turn costlier with Mr. Balagopal announcing a Social Security Cess on all three items. The Budget also announced hikes in the one-time tax on motorcycles, cars and private service vehicles, the one-time cess on newly-registered motor vehicles, and the electricity duty applicable to commercial and industrial units.
Further, Friday’s announcements included a 20% increase in fair value of land and stamp duty revision from 5% to 7%.
Through these measures, the State government hopes to generate an additional revenue of ₹2,955 crore during the 2023-24 fiscal.
The electricity duty applicable to commercial and industrial units will be hiked to 5%, mopping up an additional ₹200 crore for the State.
The Budget also announced measures for raking in an additional ₹600 crore as non-tax revenue from the mining and geology sector. This is being realised through a slew of measures including royalty hikes across all segments of minor minerals, introduction of a price differential system for granite, and revision of penalties related to the mining and geology sector.
Mr. Balagopal, who said that Kerala is ‘‘countering hard Budget constraints’‘ given the limited elbow space offered by the Centre on the fiscal front, also announced the government’s intention to revise the property tax, which could bolster the own fund of local bodies by ₹1,000 crore.
This will be through a ‘‘proper method of taxation’‘ of multiple ownership of houses and newly built houses lying vacant.
Further, various service charges levied for application, scrutiny and permits will also be increased.
Although the social security cess on fuel and liquor is meant to serve as a ‘seed fund’ for the government’s social security commitments, the government has not hiked the social security pension from the monthly ₹1,600.
The 2023-24 State Budget envisions revenue receipts of ₹1,35,418.67 crore and a revenue expenditure of ₹1,59,360.91 crore.
Mr. Balagopal said ₹1,000 crore will be earmarked through the Kerala Infrastructure Investment Fund Board (KIIFB) for acquiring land for the development of an industrial corridor connected to the Vizhinjam international seaport.
The Budget has enhanced the support price of coconut from ₹32 to ₹34, and earmarked ₹600 crore towards the rubber subsidy, and ₹131 crore for the ailing Kerala State Road Transport Corporation (KSRTC).
The Budget also announced a special purpose vehicle for setting up a chain of no-frills airstrips, and ₹360 crore as lump-sum for major infrastructure projects. The special development packages for Idukki, Wayanad and Kasaragod have been earmarked ₹ 75 crore each, and ₹30 crore for the Sabarimala master plan.