The state is facing serious financial crisis after the previous government failed to collect around Rs 23,900 crore as tax during the past three years, Issac alleged. The economic situation in the state would worsen if the crisis in Gulf countries continues.
The State government is envisaging a package of Rs 20,000 crore to develop basic infrastructure facilities, with the anti-recession package and around Rs 8,000 crore to acquire land for the infrastructure development. It is expected to allocate around Rs 2,300 crore for laying 137 new roads. Around Rs 1,000 crore out of the anti-recession package will be allocated to improve the standard of one government school in each constituency to international standards.
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It is expecting to produce around 1,000 Mw of power from roof-top solar. The government will look at setting up a large-scale factory for manufacturing LED bulbs and solar panels and has allocated Rs 25 lakh to prepare project report on whether a defunct glass factory could be used for this.
The government is aiming at making almost 20 per cent of the transportation of goods through coastal shipping and through canals and has allocated around Rs 15 crore for this. Another Rs 500 crore to expedite development of Azheekkal port.
It has also ensured availability of money for development of Vizhinjam International Cargo Shipment Port, of which a large share of investment on developing the port is committed by the State government.
The budget also proposes development of Kochi-Palakkad Industrial Corridor, to bring in industrial parks and facilities in the catchment of NH 47 and land acquisition will start soon. Around 500 acre each in Eranakulam, Thrissur and Kannambra for the development of Kochi-Coimbatore Hi-Tech Industrial Corridor.
Five multi-purpose industrial zones will be started, and a total of 5,100 acres will be taken over with Rs 5,100 crore, of which around Rs 1000 crore this fiscal year. Rs 25 lakh has been allocated to a committee to study and report on possibilities of setting up an industrial complex to make value added products from minerals and metals, including titanium metal.
Around Rs 1,000 crore will be allocated to a large-scale insurance scheme in which various non-communicable diseases such as paralysis, cardiac issues, lung and kidney diseases and brain tumor. It will also set up a seperate department for women, which will handle various schemes and also gender audit
The government will introduce a comprehensive law for the migrant workers.
He added that the government will have to differ new appointments except for sectors like Health, to another two years. This will reduce the increase in revenue expenditure.
The state can overcome the financial crisis if it can attract investment of around Rs one lakh crore in next five years. It has also announced funding and supporting activities to promote start ups.
The government is expecting to increase revenue from taxes to 25 per cent. The state will continue to have checkposts even if the GST is implemented. Tax has been increased on packaged wheat products, Basmati rice, coconut oil brought in from other states, 14.5 per cent fat tax on ready-to-eat food including burger, pizza, pasta sold by branded restaurants. The fat tax is expected to bring in Rs 10 crore additional revenue, expects the government.
It has also imposed a green tax on private vehicles with four wheel or more and older than 15 years and transport and other vehicles with four or more wheels older than 10 years. It will initiate Rs 1,300 crore investment for new projects in Information Technology sector and around Rs 250 crore to change all filament bulbs to CFL lamps.
The previous government had to collect a total of Rs 1,30,130 crore for the last three years, of which around 81.63 per cent was collected while around Rs 23,900 crore was not collected. This was the major reason for the financial crisis in the State.
The State's capital expenditure has been lower compared to that of other state governments. The percentage of capital expenditure in the government's total expenditure has come down from 10.64 per cent during the Left Democratic Front's (LDF) tenure to 6.51 per cent in 2014-15, during the tenure of the United Democratic Front (UDF) government, he alleged. Almost 60-70 per cent of the money borrowed goes to the day to day expenditure of the government and if this continues, the revenue deficit would go up to over Rs 20,000 crore next fiscal year, mainly due to clearance of arrears related to salary enhancement, said the Finance Minister