Isaac said the Centre's fiscal policies are impacting Kerala's economy and while the State was estimating Rs 24,915 crore as borrowings, or three per cent of the State's Own revenue, Rs 5,325 crore was cut down in the middle of the year. It was again cut by Rs 3,000 crore, which added pressure on the State's treasury.
The default in GST compensation will cross Rs 3,000 crore in February. Including these payments, in the three months between January to March, there will be a Rs 8,330 crore decline in Centre's financial support including loans to the State. Various issues in GST implementation, rate cuts and the economic slow down is expected to result in a reduction of Rs 10,113 crore of estimated tax revenues during this year.
The State government's expenditure has grown 16.13 per cent on an average between 2013-14 and 2018-19, though the revenue income has grown only at 13.26 per cent, which has increased the impact of the crisis.
“We have to strengthen the State's development without curtailing capital expenditure. It is keeping this aim that the government has planned Rs 1,103 crore of additional revenue collection. Compared to the previous budget, there are recommendations in this budget to increase the State's own revenue. Revenue deficit is expected to come down to 1.55 per cent compared to 2019-20 revised estimates of 2.01 per cent. Fiscal deficit will be contained at three per cent," he said.
Plans are to save Rs 1,500 crore in expenditure, by striking off the names of those not eligible for welfare pensions, among other initiatives. Another proposal is to save Rs 7.4 crore by taking electric cars on rent from EESL.
Kerala will also reorganise the GST department by assigning 75 per cent of the officials for tax collection. The government is also aiming to expand the tax net with 100,000 new registrations. Measures will be taken to reduce GST evasion. Around Rs 13,000 crore is pending under the Kerala Value Added Tax and an amnesty programme has been announced under which the arrears will be cleared including those are under dispute in various courts.
The government has waived off taxes for various electric vehicles. Motorcycles priced at more than Rs 2 lakh will attract one per cent additional tax, and cars priced up to Rs 15 lakh and private service vehicles will be taxed two per cent extra, which will bring an additional revenue of Rs 200 crore.
Kerala Stamp Act will be amended to fix price of land according to the rates fixed by the Central Public Works Department. Fair price of land will also be increased by 10 per cent.
The Kerala Infrastructure Investment Finance Board (KIIFB), under the anti-recession package, has approved 675 projects worth Rs 35,028 crore including land acquisition for Rs 14,275 crore for industrial parks. Preparations has been completed to spend Rs 20,000 crore under KIIFB during 2020-21.
Companies including automajor Nissan, infrastructure developer Taurus, IT major Tech Mahindra, Consulting firm E&Y among others have already started their projects in the State. Several global electronic majors have showed interest to invest in the State, and due to the non-disclosure agreement, the government in not in a position to declare their names. IT and IT related sectors in the State currently employs one lakh people and in 2021, another 85,000 people will be added.
State government will also take steps to rationalise the stamp duty for start-up registration, to avoid companies from the State registering their headquarters in the neighbouring states.
Land acquisition for a greenfield railway line connecting both ends of the State, will start in 2020. The railway line, named as Silver Line project, will connect Thiruvananthapuram to Kasargode allowing passengers to reach from one end to the other in four hours for Rs 1,457. The State government is looking at funding from various funding agencies including the Japanese development agency to fund the project.
The share of industries in the State's Own Tax Revenue has gone up from 9.8 per cent in 2014-15 to 13.2 per cent in 2018-19. Local Self Governments has been allocated with Rs 12,074 crore for 2020-21. Total allocation for women in the budget is 18.4 per cent, which is an increase from 11.5 per cent 2017-18. Rs 19,130 crore has been allocated for public education sector.