Opposition sees bleak finances

Isaac says it’s an alarmist propaganda, financial crunch transient

The Congress-led United Democratic Front (UDF) Opposition walked out of the Assembly on Tuesday after painting a grim picture of the State’s financial situation.

They demanded the resignation of Finance Minister T.M. Thomas Isaac and sought the adjournment of the usual business of the House to debate the “undeclared financial emergency” and treasury “shutdown”.

Congress legislator V.D. Satheeshan, who gave notice for the adjournment motion, evoked 19th century French writer Emile Zola to censure Dr. Isaac.

Mr. Satheeshan, with some theatrical flourish, drew a parallel between himself and Zola, who in an open letter had famously indicted the French President of the time for maladministration.

“Like Zola I accuse Dr. Isaac of profligacy, financial shenanigans and economic doublespeak,” he said.

A grim picture

The treasury was empty. The government had put a ceiling on Plan and non-Plan fund expenditure. Contractors found their bills rejected. Cost overruns, revised estimates, and tender excesses were the order of the day. Local self-governments had ceased to function. State’s revenues had plummeted and tax collection had fallen. Per capita debt had spiked. The Kerala Infrastructure Investment Fund Board (KIIFB), Dr. Isaac’s “dreamy panacea” for the State’s economic problems, was a non-starter.

The government squandered tax payers’ money on private consultancies, high-paid advisers, and in hiring expensive lawyers to stave off CBI inquiries to protect CPI(M) workers accused in political murders.

Dr. Isaac had guilefully deducted last fiscal’s “pending queue bill clearances” and treasury payments for “spillover works” from the 2019-20 Plan fund to “feign” a “make believe” 50% Plan fund utilisation. The crisis was of Dr. Isaac’s making.

Dr. Isaac termed the Opposition’s charges as alarmist propaganda. An expected 16% increase in State expenditure was not extravagance. The State faced a financial crunch. But it was transient. The Centre owed Kerala ₹1,600 crore as GST component. It had also slashed Kerala’s statutory liquidity ratio, thus hobbling the ability of the State to raise loans to tide over the current cash shortfall.

The State had not defaulted on welfare pensions and development works despite financial constraints not of its making, he said.

Speaker P. Sreeramakrishnan denied Opposition leave to debate the matter.