Kerala budget tabled; fuel, liquor set to cost more | Latest News India - Hindustan Times
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Kerala budget tabled; fuel, liquor set to cost more

Feb 03, 2023 11:59 PM IST

Finance minister K N Balagopal projected a revenue receipt of ₹1.35 lakh crore and expenditure of ₹1.76 lakh crore, as he presented the state budget for 2023-24 financial year in the legislative assembly

Thiruvananthapuram: Fuel, liquor, motorcycles and electricity in Kerala are set to cost more from the next financial year as the state government proposed a social security cess on their sale, to mobilise additional revenue, in its budget announced on Friday.

Kerala finance minister proposed a social security cess of <span class='webrupee'>₹</span>2 per litre on the sale of petrol and diesel (Shutterstock)
Kerala finance minister proposed a social security cess of 2 per litre on the sale of petrol and diesel (Shutterstock)

Finance minister K N Balagopal projected a revenue receipt of 1.35 lakh crore and expenditure of 1.76 lakh crore, as he presented the state budget for 2023-24 financial year in the legislative assembly. He proposed a cumulative deficit of 82.25 crore.

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“The state has been on an upward trajectory in terms of growth. Despite many rigors, domestic production increased. Many with vested interests say Kerala lost badly but it did not,” he said.

The state will mobilise revenue collection on war footing and check expenses to tide over the crisis, he added.

Balagopal proposed a social security cess of 2 per litre on the sale of petrol and diesel. “This is expected to bring in an additional revenue of 750 crore to the Social Security Seed Fund,” he said.

Similarly, the government proposed a cess of 20 for each bottle of Indian-Made Foreign Liquor (IMFL) in the price range of 500-999 and 40 for each bottle costing above 1,000. “An additional revenue of 400 crore is expected through this,” Balagopal said.

Kerala is among states (like Andhra Pradesh, Tamil Nadu) that impose higher tax on liquor, ranging from 300% to 600%.

The minister said the state will also encourage production of extra neutral alcohol (food grade alcohol) and that it will further help generate jobs.

The state government also proposed an additional tax of 2% on motorcycles priced up to 2 lakh. Electricity duty for commercial and industrial sectors was hiked from 2% to 5%. The registration fee of vehicles was also proposed to be raised from 1% to 2% .

The existing fair value of land would be increased by 20% to bridge the gap between market value and fair value, the minister said.

The education sector got a hike of 200 crore – from 1,500 crore in 2022-23 to 1,773 for 2023-24.

The state government allocated 2,000 crore to check inflation through market intervention (there are several government outlets that give groceries food items at subsidised rates) and earmarked 2,828 crore for the health sector. The state will be turned into a global health hub with higher allocation, Balagopal said.

“With good health care and infrastructure, the state has the potential to become a health hub as health expenditure is going up in many countries. We will also promote health tourism in a big way,” he said.

While 600 crore was earmarked for rubber subsidy, 100 crore was allocated to expand the Make in Kerala project to boost the state’s domestic production and generate employment and investment opportunities. 80 crore was set aside to eradicate poverty and the Life Mission (houses for needy) project was allocated 1,436 crore, the minister said.

Balagopal said the upcoming Vizhinjam project in south Kerala will be a game changer and the government will loosen its wallet to develop infrastructure around the mother ship terminal.

The port project, of the Adani Group, was at the centre of a controversy and witnessed intense protests and violence by local fishermen and the Latin Catholic church. The protesters alleged the unscientific construction of groynes, the artificial sea walls known as “pulimutt” in local parlance, as part of the port was one of the reasons behind increasing coastal erosion in the district.

As many as 36 police personnel and 30 protesters were injured in violence in December.

Balagopal said that though the state’s economy is facing challenges due to the financial policies of the Centre and its decision to impose cuts on its borrowing limit, it is not in a debt trap.

“Some people spread canards that the state was in deep trouble. Its fundamentals are strong and it is in a position to take more loans. But the Centre’s cap and mixing of non-budgetary provisions with the yearly outlay aggravated the situation,” he said, adding there was no plan to wind up any welfare pensions.

The opposition hit out at the state government for imposing numerous taxes and alleged the new budget will put extra burden on the people.

“It is sad that men on the street will have to pay for the financial mismanagement of the government. He (chief minister Pinarayi Vijayan) hasn’t spared any sector. The cess on petroleum products is unreasonable and it will affect all sectors,” opposition and Congress leader V D Satheesan said.

State Bharatiya Janata Party (BJP) president K Surendran said the “Centre cannot be blamed for the financial mess created by the state government”. “When many states are easing taxes on fuel to get some respite, Kerala is hiking it again,” he said.

The ruling CPI(M) said the budget was a growth-oriented one, with emphasis on social sectors.

“It is a people-friendly budget in the light of the Centre’s move to squeeze the state,” the party said in a statement.

Experts believe the budget may not prove to be useful.

“The desperate government explored all opportunities to extract revenue and it will create more problems than solving any. The surcharge on fuel will trigger price rise in all sectors. The state cannot walk away easily, blaming the Centre like this,” economist B S Prakash said.

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  • ABOUT THE AUTHOR
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    Ramesh Babu is HT’s bureau chief in Kerala, with about three decades of experience in journalism.

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