Kerala - Thiruvananthapuram   

Mani: budget reflects fiscal mismanagement

THIRUVANANTHAPURAM: Kerala Congress (M) leader and the former Finance Minister K.M. Mani has described the 2008-’09 budget “a document that reflected the magnitude of financial mismanagement by the Left Democratic Front (LDF) government.”

Participating in the debate on the budget in the Assembly on Tuesday, Mr. Mani regretted what he termed ‘levity’ evident in the budget presented by Finance Minister T.M. Thomas Isaac and said its assumptions were more based on the Finance Minister’s own misunderstanding of the state of Kerala’s fiscal affairs than a proper appreciation of reality.

He contended that contrary to the Finance Minister’s claim, the State was in the grip of a debt trap as evidenced by the huge interest burden of Rs.5,144 crore in a situation where the State had a fiscal deficit of Rs.5,625 crore and a revenue deficit of Rs.3,300 crore. Mr. Mani said it was nobody’s case that there was no buoyancy in tax revenue in the State. Tax revenue was buoyant when the UDF was in power and the trend was the same now.

As for tax arrears, the Finance Minister’s claim that the arrears did not run into thousands of crores did not tally with facts as he himself had stated in the budget speech that arrears of the order of Rs.4,280 crore remained to be collected.

The revenue deficit was on the rise and had gone up from Rs.2,637 crore in 2006-’07 to Rs.4,644 crore in 2007-’08.

There was fall in plan expenditure and the Finance Minister himself had stated that Rs.1,905 crore could not be spent during the current year.

Mr. Mani also contended that the Finance Minister’s decision to impose a 1 per cent cess on value added tax and sales tax would result in all round price rise.

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