Kerala Govt eyes Bevco boost

THIRUVANANTHAPURAM: The state is so woefully short of money that it has nothing to spare for welfare pensions or paddy procurement but it has somehow managed to mobilise over Rs 3,000 crore in a trice for Onam-related outgo in the form of bonus, festival allowance and market intervention.

This seeming sleight of hand has been achieved by extracting advance tax from the Beverages Corporation, petroleum companies and big traders, and also by dipping its hand into the coffers of cash-rich boards like Toddy Workers’ Welfare Board and Construction Workers’ Welfare Board.

Onam, therefore, will look adequately prosperous. But, as a top Finance Department official put it, the crisis has merely been postponed.

“Getting advance tax is not anything new but what should be truly worrying is that we have been forced to use up our future income even after we had borrowed a humongous Rs 4,500 crore during the last four months,” a top department source said.

This is indication that tax collection has still not picked up; the growth in tax revenue is still lagging at 8-9%.

The months building up to Onam are when consumption in the state violates economic laws. June, July and August, therefore, witness a massive surge in tax revenue. After this, the revenue tapers.

“Now that we have already absorbed our future taxes, the coming lean months will fetch even less income,” the official said.

Political interference, even after corruption charges have come to light, continues to dampen tax mobilisation efforts.

For instance, a senior tax official said, when a Rs 58-lakh notice was slapped on a soda and soft drink unit in Alappuzha for evasion, the order was stayed by the finance minister himself.

During the LDF period, the welfare boards had kept their money in the Treasury. Once the UDF came to power, the policy was reversed to allow boards to park their funds in private banks.

“This led to a dramatic decline of treasury funds, constricting the government’s power to negotiate economic crises,” said Gopan Mukundan, a Sasthra Sahithya Parishad member.