Budget will place an emphasis on spurring economic activity: Balagopal

► Date : Jan 28, 2023


The LDF government's emphasis on stimulating economic activity and welfare-oriented measures will be reflected in the State Budget for 2023-24, according to Finance Minister K. N. Balagopal on Friday.


In a pre-budget interview with The Hindu, Mr. Balagopal hinted at hikes that are par for the course, despite speculation of steep tax increases.


"We do have limitations in increasing taxes excessively with the introduction of the Goods and Services Tax (GST)," he said. At the same time, he emphasised the importance of "timely revisions" in certain areas, such as service charges that have not been raised in decades.


Mr. Balagopal is scheduled to present the State budget for the 2023-24 fiscal on February 3. Revenue mobilisation is expected to be high on the agenda this time.


Mr. Balagopal maintained that Kerala will be deprived of around ₹24,000 crore this fiscal due to the discontinuation of GST compensation, dip in revenue deficit grant and reductions owing to the Centre’s treatment of ‘off-Budget’ borrowings through the Kerala Infrastructure Investment Fund Board (KIIFB) as direct State debt.


“With the introduction of GST, we have lost much of our taxation rights, except for items such as liquor and petroleum. Even hikes within that small space will generate only a small portion of what is needed,” he said.


The Budget will have measures for taking forward the growth in core sectors such as agriculture and industry, he said. Stress will be laid on the use of modern technology in these sectors, thereby increasing economic activity and revenue generation. “Previous Budget put thrust on it. Such measures will be continued,” he said.


The Central government’s stand on KIIFB places difficulties in the State’s path, but the State hopes to overcome it as KIIFB is important for the State’s future, he said.


KIIFB has sanctioned 993 projects with a total outlay of ₹ 73,908 crore. “The Centre’s stand affects our plan space. The Chief Minister has written to Prime Minister Narendra Modi on this and we have also received legal opinion that the Centre’s stand is incorrect. We hope that they will correct it,” Mr. Balagopal said.


Budget 2023-24 will also reflect the LDF government’s emphasis on social welfare measures, he said. “The Kerala economy is known for its stress on public welfare; Good schools, good hospitals, and good infrastructure. This government will continue to lay stress on this aspect,” he said.


► Tags : #tax #LDF #gst

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