The Union Budget presented by Union Finance Minister Nirmala Sitharaman on Tuesday is ''disappointing'' and ill-equipped to deal with the crisis engendered by the COVID-19 pandemic, State Finance Minister K.N. Balagopal has said.
The expectation that the Budget would strengthen the public sector and help generate more employment in the country has not materialised, Mr. Balagopal said, responding to the Budget announcements.
On the whole the Budget is disappointing for Kerala, he said. The State's demands, including sector-specific packages for overcoming the pandemic-induced crisis, the SilverLine semi high-speed rail project and a medical institute modelled on AIIMS, have failed to find any mention, Mr. Balagopal said.
GST compensation
He expressed dismay that the compensation period of the Goods and Services Tax (GST) has not been extended by five more years as demanded by the States. The compensation period ends on June 30, and Kerala alone stands to lose between ₹ 10,000 crore and ₹ 12,000 crore annually. Mr. Balagopal said.
The borrowing limit of the States has effectively been reduced to 3.5% of the Gross State Domestic Product (GSDP), he said. While 4% is permitted in the 2022-23 financial year, of this 0.5% is tied to power sector reforms. Mr. Balagopal termed inadequate the Budget allocation of ₹ 1 lakh crore to assist the States 'in catalysing overall investments in the economy. A State like Kerala would get roughly ₹2,000 crore to ₹3,000 crore from it, he said, urging the Centre to spend more.
On the decision to reduce the 18.5% alternate minimum tax on cooperative societies to 15%, the same rate as companies, Mr. Balagopal pointed out that States with robust cooperative sectors, including Kerala, vehemently oppose taxation on the cooperative sector, given the nature of the public involvement in it.
Lesser allocation
The Budget has lesser allocations for MSP on paddy and wheat this year compared to previous years, he said, on the ₹2.37 lakh crore allocation. Last year, the actual spending was to the tune of ₹2.48 lakh crore, he said. Likewise, the allocation for vaccines in 2022-23 also is lower compared to the current year, he said.
He also objected to the Budget announcement related to the ‘One-Nation One-Registration Software’ for ‘anywhere registration’ of deeds and documents, saying that it encroaches upon a State subject.
