Floods that have caused extensive damage in the State are feared to debilitate the economy and may prompt the government to either cut its Plan size or tweak projects to tackle the exigency.
The State has been weathering a grave financial crisis and the tax collection, lurking at an average 14%, was expected to pick up in the coming months.
But in the event of a dip in business, especially that of white goods, tax collection would be seriously impaired and the government’s plans to pep up its finances may go awry.
Onam is hardly a month away and trade and industry circles are pinning their hopes of making a fresh start with the festival season. Chances of a revival within a month are too remote and it would be a double whammy for the State.
Central stance
The Central government’s strong stance against the State’s plea to raise its annual borrowing limits has already left the latter in dire straits. The current crisis may force the State to go in for major austerity measures, including a massive cut in expenditure.
A cut in the Plan size of local self-government institutions and government departments has become imperative since this is one major option left before the government to mop up resources for another bout of rehabilitation and rebuilding activities, sources say.
The planning process of local bodies too would be affected and they may be forced to redraw their projects and switch over to the rehabilitation mode, the second time in a year. This is rather a time-consuming and challenging process.
The Plan projects of various departments for the current year will have to be tweaked to meet the post-flood commitments of the government.
Projects that have not been launched so far may either be shelved or deferred and new priorities would be set to channelise resources for rehabilitation and reconstruction.
Such issues would come up for discussions only after mitigating the woes of the flood victims.
The State Planning Board and the government would address the crisis, sources say.
