The Kerala government is facing a heavy backlash from the general public after they presented the budget for the financial year 2023-24 recently. The budget marked a continued trend of deteriorating financial condition of the state and how government has tried to shift this burden on to the poor people instead of finding novel methods to manage the situation. As the Pinarayi Vijayan government enters in to its 7th year of governance, this article will look in to why budget 2023 is a representation of fiscal mismanagement of Kerala by communist government and why it is an anti-poor document keeping with the trend of robbing the poor?
A Blueprint To Encash The Poor
The State Budget has adopted an anti-poor approach charting out novel methods to rob the poor. Opposition parties in Kerala also has staged protests in different parts of Kerala on Saturday against the LDF government’s budget proposal to impose cess on petrol, diesel and liquor. Considering the fact that while Centre slashed excise duty of ₹13 on petrol and ₹16 on diesel last year. Kerala has reduced ₹1 at the same time. This year, they have increased ₹2. The Kerala government is also facing a heavy backlash from the general public after they presented the budget for the financial year 2023-24 on Thursday. As per the citizenry of Kerala, the increase in cess on petrol and diesel will lead to a huge price hike. The prices of daily necessities have more than doubled in Kerala. The ‘robbing’ effect of the budget was also well articulated by Shashi Tharoor who is inspiring to get a foothold in Kerala politics. Speaking to ANI, Tharoor said, “It is an extremely disappointing budget. The Budget is unfortunately exploiting the common man. Because the government seems to have no imagination, no idea how to generate revenue.” “Instead of promoting more revenue-generating activities, all they are trying to do is tax people. An extra cess on fuel…₹2 per litre for petrol and diesel. Also, more primitive tax on alcohol where there is already the highest tax on alcohol in the entire country,” he said. The Congress leader said taxes and cesses on everything have an inflationary effect. “When you put ₹2,000 crore to control inflation, it makes no sense at all. So, it is a deeply disappointing budget. If this budget is for say a school exercise, you will get a failure mark,” Tharoor said.
Instead of taking apt measures to collect the tax gap of over ₹70,000 crore and declaring austerity measures to better fiscal position, the government has dug into the pockets of the poor and the middle-class who are already burdened by the financial crisis. The budget has disappointed the public by imposing huge burden on them at the same time not giving them back anything in return.
A State In Fiscal And Social Decline
“A state which was famous for its welfarism and governance model has now become a paradise for corrupt communist which has left Kerala in a state of mismanagement.”
Kerala is in an extremely bad financial situation. The debt of Kerala government has climbed to almost ₹4,00,000 crore and small Kerala has surpassed most of the Indian states in this debt situation. The debt/GDP ratio is at 37% and a recent RBI report titled ‘State finances: A risk analysis’ indicates dark days ahead for the state. The major reason for the crisis is the inefficient handling of the fiscal situation by the successive Pinarayi Vijayan government. Being a consumption state with no visible major industries to bring in revenues, the state is solely dependent on tax revenues and money pumped in by expats. In 2017, the state had relaunched an ambitious off-budget infrastructure development scheme under the Kerala Infrastructure Investment Fund Board (KIIFB), essentially aimed at circumventing the budgetary loan taking restrictions imposed by the Kerala Fiscal Responsibility Act under the Fiscal Responsibility and Budget Management Act, 2003. The source of KIIFB will be cess on petrol, motor vehicle tax, loans, and grants from the government. After six years, KIIFB has turned out to be failure. 962 projects worth ₹75,000 crore were announced, but only projects worth Rs 6,300 crore have been completed by February 2022. Projects worth ₹20,000 crore are in early stages of completion. The Comptroller and Auditor General of India in a report later declared that all off-budget borrowings form an integral part of state finances, thus landing all KIIFB projects in a self-created mess.
The Kerala welfare model is also failing. It looks like Kerala is quickly losing out to other states in an area where it was perennially considered a model: social welfare spending. That Kerala’s status as the country’s pre-eminent welfare state has long taken a beating was revealed in Reserve Bank of India’s latest study ‘State Finances: A Study of Budgets of 2022-23’. Kerala’s social sector expenditure in 2004-05, which was 36.2 per cent of its total expenditure, was the fourth highest in the country. Only the newly formed states of Chattisgarh and Jharkhand, which were formed in 2000 specifically to improve social sector spending, had better figures: Chattisgarh (37.7 per cent) and Jharkhand (44 per cent). The small north eastern state of Tripura, too, had spent more (37.6 per cent). Kerala was then beacon of welfarism. A decade and a half later, by 2020-21 Kerala’s rank fell steeply to 21. Now, almost all other states spend more on social services than Kerala. However, it is the fall in education spending that will have a bearing on Kerala’s future. Kerala’s expenditure on education has not even stagnated in the last one-and-a-half decades. It has fallen. From 16.6 per cent in 2004-05, it dropped to 11.4 per cent in 2020-21. There is not much cheer in public health spending, too. In 2004-05, by spending 4.9 per cent of its total expenditure, Kerala was the eighth highest spender on public health. Kerala is at 13th position in the country.
Kerala is rotting fast both fiscally and socially and this is being reflected in numbers. A state which was famous for its welfarism and governance model has now become a paradise for corrupt communist which has left Kerala in a state of mismanagement.
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Kerala Budget 2023: Left Govt Continues Trend Of Keeping The Poor Poorer
The Kerala government is facing a heavy backlash from the general public after they presented the budget for the financial year 2023-24 recently. The budget marked a continued trend of deteriorating financial condition of the state and how government has tried to shift this burden on to the poor people instead of finding novel methods to manage the situation. As the Pinarayi Vijayan government enters in to its 7th year of governance, this article will look in to why budget 2023 is a representation of fiscal mismanagement of Kerala by communist government and why it is an anti-poor document keeping with the trend of robbing the poor?
A Blueprint To Encash The Poor
The State Budget has adopted an anti-poor approach charting out novel methods to rob the poor. Opposition parties in Kerala also has staged protests in different parts of Kerala on Saturday against the LDF government’s budget proposal to impose cess on petrol, diesel and liquor. Considering the fact that while Centre slashed excise duty of ₹13 on petrol and ₹16 on diesel last year. Kerala has reduced ₹1 at the same time. This year, they have increased ₹2. The Kerala government is also facing a heavy backlash from the general public after they presented the budget for the financial year 2023-24 on Thursday. As per the citizenry of Kerala, the increase in cess on petrol and diesel will lead to a huge price hike. The prices of daily necessities have more than doubled in Kerala. The ‘robbing’ effect of the budget was also well articulated by Shashi Tharoor who is inspiring to get a foothold in Kerala politics. Speaking to ANI, Tharoor said, “It is an extremely disappointing budget. The Budget is unfortunately exploiting the common man. Because the government seems to have no imagination, no idea how to generate revenue.” “Instead of promoting more revenue-generating activities, all they are trying to do is tax people. An extra cess on fuel…₹2 per litre for petrol and diesel. Also, more primitive tax on alcohol where there is already the highest tax on alcohol in the entire country,” he said. The Congress leader said taxes and cesses on everything have an inflationary effect. “When you put ₹2,000 crore to control inflation, it makes no sense at all. So, it is a deeply disappointing budget. If this budget is for say a school exercise, you will get a failure mark,” Tharoor said.
Instead of taking apt measures to collect the tax gap of over ₹70,000 crore and declaring austerity measures to better fiscal position, the government has dug into the pockets of the poor and the middle-class who are already burdened by the financial crisis. The budget has disappointed the public by imposing huge burden on them at the same time not giving them back anything in return.
A State In Fiscal And Social Decline
“A state which was famous for its welfarism and governance model has now become a paradise for corrupt communist which has left Kerala in a state of mismanagement.”
Kerala is in an extremely bad financial situation. The debt of Kerala government has climbed to almost ₹4,00,000 crore and small Kerala has surpassed most of the Indian states in this debt situation. The debt/GDP ratio is at 37% and a recent RBI report titled ‘State finances: A risk analysis’ indicates dark days ahead for the state. The major reason for the crisis is the inefficient handling of the fiscal situation by the successive Pinarayi Vijayan government. Being a consumption state with no visible major industries to bring in revenues, the state is solely dependent on tax revenues and money pumped in by expats. In 2017, the state had relaunched an ambitious off-budget infrastructure development scheme under the Kerala Infrastructure Investment Fund Board (KIIFB), essentially aimed at circumventing the budgetary loan taking restrictions imposed by the Kerala Fiscal Responsibility Act under the Fiscal Responsibility and Budget Management Act, 2003. The source of KIIFB will be cess on petrol, motor vehicle tax, loans, and grants from the government. After six years, KIIFB has turned out to be failure. 962 projects worth ₹75,000 crore were announced, but only projects worth Rs 6,300 crore have been completed by February 2022. Projects worth ₹20,000 crore are in early stages of completion. The Comptroller and Auditor General of India in a report later declared that all off-budget borrowings form an integral part of state finances, thus landing all KIIFB projects in a self-created mess.
The Kerala welfare model is also failing. It looks like Kerala is quickly losing out to other states in an area where it was perennially considered a model: social welfare spending. That Kerala’s status as the country’s pre-eminent welfare state has long taken a beating was revealed in Reserve Bank of India’s latest study ‘State Finances: A Study of Budgets of 2022-23’. Kerala’s social sector expenditure in 2004-05, which was 36.2 per cent of its total expenditure, was the fourth highest in the country. Only the newly formed states of Chattisgarh and Jharkhand, which were formed in 2000 specifically to improve social sector spending, had better figures: Chattisgarh (37.7 per cent) and Jharkhand (44 per cent). The small north eastern state of Tripura, too, had spent more (37.6 per cent). Kerala was then beacon of welfarism. A decade and a half later, by 2020-21 Kerala’s rank fell steeply to 21. Now, almost all other states spend more on social services than Kerala. However, it is the fall in education spending that will have a bearing on Kerala’s future. Kerala’s expenditure on education has not even stagnated in the last one-and-a-half decades. It has fallen. From 16.6 per cent in 2004-05, it dropped to 11.4 per cent in 2020-21. There is not much cheer in public health spending, too. In 2004-05, by spending 4.9 per cent of its total expenditure, Kerala was the eighth highest spender on public health. Kerala is at 13th position in the country.
Kerala is rotting fast both fiscally and socially and this is being reflected in numbers. A state which was famous for its welfarism and governance model has now become a paradise for corrupt communist which has left Kerala in a state of mismanagement.
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