Isaac’s Budget Promising Despite Constraints
Kerala had put forward a charter of demands, including the Angamali-Sabari railway line, raising rubber subsidy, granting of AIIMS and so on – none of which found mention in the Union Budget.
The Centre has not agreed to raise borrowing limit of the State which now faces a revenue deficit of Rs. 15,201 crore. With the GST compensation that the State relies on to pay salaries and pension, and its share of the IGST being withheld by the Centre, the State government’s finances have been strangulated.
With no other option the FM has been constrained to raise taxes, fee and duties – building tax and land fair price to start with. The local real estate sector, already grappling with huge unsold inventory and sluggish demand, will bleed further. As expected, the cabinet hiked liquor license fee with effect from April 1.
Under such trying circumstances, Kerala FM Thomas Isaac has delivered a reasonable budget to spur development and growth. Rs. 500 crore investment in KINFRA parks; air strip in Idukki; 12 heritage museums in Alappuzha; Rs. 6000 crore for Kochi Development Fund; Rs. 323 crore for tourism and an additional Rs. 20 crore for Champions Boat League, are some of the major announcements.
The FM has stated that land acquisition for the semi-high speed rail project will start this year and the project will complete in three years. Reduction in stamp duty for forming new companies has been a long pending demand and the FM has consented.
Kerala Budget 2020 has also extended a helping hand to the startup community. Kerala Startup Mission (KSUM) has been allocated Rs. 73.50 crore. The budget also focuses on helping startups tide over capital paucity. KFC and KSIDC would offer security free loans to startups which have secured work order from government/major corporates.
With the Centre non-supportive and local taxes breaching reasonable threshold, the State government has no choice but to look inwards to cut expenses.