Development to suffer this fiscal: Thomas Isaac
Nearly Rs 9,000 crore gobbled for non-plan needs.
Thiruvananthapuram: Finance minister Dr T M Thomas Isaac has found himself in the unenviable position of a tenant who, instead of easing into domestic life, will have to spend his first years reconstructing the house he has moved into. It is just two months into the 2016-17 fiscal and nearly Rs 9000 crore has virtually been gobbled up for non-plan needs; immediate liabilities have accumulated to Rs 5784 crore and Rs 2800 crore have already been borrowed from the open market.
The Finance Department has quickly revised deficit figures. Revenue deficit, it is now estimated, will shoot up to 2.78 percent of the GDP, the highest in over a decade. Former Chief Minister Oommen Chandy, while presenting the 2016-17 Budget in February, had said it could be tamed to 1.50 per cent this fiscal.
Dr Isaac said that "very little" development was possible this fiscal. He said his first big challenge would be to increase “off-budget borrowing investment”. “If finances are so poor, it will be a mighty task to get investors interested in big ticket projects,” Dr Isaac said. His ‘Alteration Memorandum’, scheduled to be presented on July 4, will announce some of these investment plans. According to Isaac, the state’s growth rate has fallen below the national growth rate.
To compound woes, the rate of growth of tax revenue has fallen below even the rate of growth. Meaning, there is no tax buoyancy. Therefore the finance minister’s second big task would be to improve tax collection. He is expected to announce a slew of measures to improve tax buoyancy.
Finance Department officials said that tax leakage was whopping 40 percent. A clean-up of check posts is expected to be a major initiative. During his last tenure, his zeal to free check posts of corruption had yielded substantial results. There was a time between 2006 and 2011 when tax growth had touched 24%.