LDF leaders urge Governor to reject tax hike ordinance

Gearing up for a showdown with the UDF Government over the tax hike issue, opposition LDF in Kerala today urged Governor P Sathasivam to reject the ordinance to be sent by the Cabinet to give effect to the proposals to mop up over Rs 2,000 crore by raising a host of duties and levies to tide over the fund crunch.
A delegation of LDF representatives including Leader of the Opposition in the assembly V S Achuthanandandan met the Governor and conveyed their views.
Faced with a grim fund crunch, the Ommen Chandy Government on September 17 steeply increased taxes on liquor, cigarettes, water charges and fees for various services to mop up additional revenue.

Dismissing the LDF contention that the present crisis was the result of inept fiscal management of the government, Finance Minister K M Mani blamed fall in allocations from the Centre as the main cause for the situation.
Taking a soft approach towards the issue, the Congress state unit wanted the Cabinet to reduce quantum of increase in water charges.
After meeting the Governor, Achuthanandan said "We have requested the Governor not to give assent to the ordinance as it not only cast a huge burden on the people but also was unconstitutional."

The CPI(M) veteran said the Governor told the delegation that he would examine the issue.

Mani said the real cause for the funds crunch being faced by the state was drastic reduction in transfer of funds due to the state by the Centre in the last two years.
He also rejected the suggestion that the present crisis was the result of the decision to sharply cut down on liquor business, which contributed handsomely to the exchequer.
"There has been a shortfall in Central allocation. In 2013-14 this was around Rs 1,200 crore. This has pushed the state into difficulty," Mani told reporters.
Meanwhile, a meeting of the KPCC office bearers wanted the government to reduce the quantum of increase in water charges in view of hardship it could pose to the people and adverse political reaction to be generated by the measure.

According to Congress sources, the party also suggested a revamp of the consumer slabs to reduce the burden on consumers, especially those in the lower rungs.
The LDF state committee yesterday chalked out a prolonged campaign against the Government over the tax hike issue.
It planned to organise ward-level meetings of next month to urge the people not to pay the increase in water charges and land taxes.