Kerala Budget: Social security cess on liquor, fuel overshadows govt’s welfare initiatives
The proposed social security cess on petrol, diesel and liquor have made the second Budget presented by Kerala Finance Minister K N Balagopal quite unpopular, as it appears from the initial responses.
While presenting the Budget for the fiscal 2023-24, the minister said it is proposed to levy a social security cess at the rate of ₹20 for each bottle of Indian-Made Foreign Liquor IMFL having MRP between ₹500 and ₹999. The cess would be ₹40 per bottle of IMFL with an MRP over ₹1,000. “This is expected to bring in an additional ₹400 crore in revenue,” he said. The cess on sale of petrol and diesel will be of ₹2 per litre.
Also read: Kerala Budget: ₹2,000 crore to address price rise,₹80 crore to eradicate extreme poverty
Clamour over alcohol, fuel price hike
The social security seed fund is anticipated to give an additional ₹750 crore in revenue as a result, he said. The minister announced that in order to close the gap between market value and fair value, the current fair value of the land also would be increased by 20 per cent.
The increase in fuel and alcoholic beverage prices has taken centre-stage despite the announcement of several initiatives for the infrastructure and higher education sectors, as well as allocations of ₹100 crore for welfare programmes and ₹2,000 crore to combat price rise. Besides this the government has increased the fair value of land by 20 per cent and the electricity duty has been hiked by 5 per cent. Vehicle taxes too has been hiked, making this budget prima facie unpopular.
Budget conceals dire financial state: Opposition
The Opposition Congress-led UDF wasted no time in slamming the Budget, accusing the government of “looting people”. Opposition leader V D Satheesan said the Left government was concealing the state’s dire financial situation and had increased taxes on the populace.
“The Budget conceals the state government’s precarious financial situation, and the proposals amount to robbing the commoner. More people will turn to drugs as a result of the decision to impose cess on alcohol. The Budget was presented without conducting proper studies,” Satheesan said. He said when the state was facing inflation, the rise in petrol and diesel prices will adversely affect the market.
‘Make in Kerala’ gets a push
The ‘Make in Kerala’ project, one of the ambitious initiatives announced in the 2015, aiming to promote domestic production has got special attention of the government this year. According to the finance minister, the initiative will be expanded with ₹1,000 crore set aside for it in order to increase Kerala’s domestic output, encourage entrepreneurship, create jobs, and open up investment opportunities. Reduced interest rates will help businesses raise capital and it will assist emerging farmers as well.
Also read: Kerala economy on recovery track; GSDP 12% in 2022: Economic Review
Terming the Make in Kerala initiative as a boost to innovation and entrepreneurship, Adeeb Ahamed of LuLu Financial Holdings and Twenty 14 Holdings, said that the project will help tap into the full potential of Kerala’s strengths as a producer state. “By fostering an ecosystem that combines market research with strong foundation of our small and big industries, we can become a net exporter to rest of India in areas such as agriculture, manufacturing, IT services etc., and narrow our trade deficit,” he said.
‘Despite global crisis, Kerala moving forward with alternative welfare policies’
Some of the other major highlights of the Budget include the allocation of ₹1,000 crore in assistance through the Kerala Infrastructure Investment Fund Board (KIIFB) for development of the Vizhinjam ring road as an industrial corridor, and ₹600 crore as rubber subsidies.
“While moving forward with a clear objective, we have to realise that the world is not in a comfortable fiscal position. Financial Institutions and leading economists are of the opinion that the world is passing through the worst economic crisis in a century. Even a developed country like Britain witnessed three prime ministers assuming office in a short span of two months,” the finance minister said in his concluding speech.
Also read: Kerala Finance Minister criticises Union Budget for neglecting state’s needs
Economic crisis and unemployment are the fundamental reasons behind political instability. Our neighbouring countries like Sri Lanka and Pakistan have fallen into severe economic crisis. Pakistan is facing such a crisis that they are even unable to buy diesel for power generation. This peculiar situation can be survived only by taking every single step forward carefully. As a matter of pride that Kerala is able to move forward with alternative welfare policies despite this global scenario,” he added.
