The government is reported to be contemplating tough expenditure curbs to cushion the mounting strain on State finances following an alarming dip in its own revenue.
Finance Department sources told The Hindu that harsh measures have become inevitable to overcome the crisis triggered by COVID-19 and different options are being explored to rein in all expenses, including the monthly committed expenditure, to an affordable limit. A lion’s share of the income is now being channelised for meeting the committed expenditure and that would come up for a thorough scrutiny, the sources said.
“The decision of the neighbouring Telangana government, which is a revenue surplus State, points to the intensity of the crisis. Considering the lack of inflow of resources and the additional expenditure incurred for virus containment, it has already issued orders for deferring payment of wages and salaries. Though not to an extreme limit, Kerala government too would have to opt for stringent measures in the current context,” the sources said.
Income sources
The prime income sources, returns from the sale of lottery tickets amounting to ₹1,350 crore, and excise duty have virtually dried up following the lockdown and prohibition. Tax from the sale of petrol and diesel have slimmed down to a trickle. The declining oil sale had been a matter of concern for the government for the past few months.
Fall in Goods and Services Tax collection and impasse in the realty sector have compounded the fiscal woes of the government. Moreover, the government had to grant entertainment tax concession, more time for paying power and water bills and also vehicle taxes and other concessions in view of the looming virus threat.
The additional expenditure incurred for providing free ration and kits of essentials to legions irrespective of their economic status and bolstering COVID-19 testing and other health care facilities in hospitals are all being met from the frugal resources at its command.
The alleged cold-shouldering of the State’s refrain for more has also prompted the government to opt for tough measures, the sources said.
