The State government may have to go in for a fresh budget for 2020-21 to reset its priorities and channelise funds for addressing the COVID-19-induced challenges.
Despite executing a systematic plan of action in containing the virus spread and holding the fatality rate, the State has still not emerged from the woods and hence will have to sustain its level of preparedness to meet grave exigencies in the weeks ahead.
This calls for a thorough overhauling of the budget proposals drawn up during the pre-COVID days with a greater accent on health care, social welfare and allied sectors. The massive influx of Non-Resident Keralites (NoRKs) has made it imperative to shore up the testing and quarantine facilities. This calls for routing of more resources for health care and to local bodies for taking up such initiatives.
The alarming dip in the State’s own tax revenues, fall in Central transfers and a cry for assistance from various sectors pointed to the need for reworking the budget proposals, sources said.
The budget had warned that in addition to the dip in Central transfers for various schemes, tax devolution from the divisible pool would take a major hit. The projections and revenue expected from various sources have all gone awry and the only option left before the government was to draw up fresh proposals to overcome the current crisis.
The COVID-19 crisis has intensified the financial stagnation that the budget had warned of engulfing the Gulf countries and compounded the woes of the repatriates. Since the prospects of returning to their workplaces are too bleak at present, the government would have to consider a fall in remittances and allied issues.
Capital expenditure as well as some Plan projects that have no immediacy will have to be deferred and stringent austerity measures, mainly cut in non-Plan expenditure, have to be adopted to make optimum use of the available resources.
Since the Kerala Infrastructure Investment Fund Board (KIIFB) is executing infrastructure development projects to a schedule, a cut in Plan projects would not cause a major impact.
Details of redrafting the proposals would largely depend on the recommendations of the expert committee constituted for studying COVID-19 impact and similar studies conducted by the Planning Board. This also calls for a political decision, sources said.
