Chief Minister Pinarayi Vijayan said the Union Budget sought to undermine the economy of individual States instead of bolstering their COVID-19 ravaged financial systems.
Mr. Vijayan said the States had joined the Centre’s GST regime in 2015-16 to rationalise many regional taxes and evolve a coherent value-added surcharge system for a range of goods and services. The tax homogenisation had cost States their revenue autonomy.
The States feared colossal revenue loss. The Centre agreed to make up for any loss of domestic revenue in local taxes by paying GST compensation for five years. Though modest and not as per original expectations, the compensation payments would grind to a halt in June 2022.
The Centre has not extended the period of GST compensation as demanded by the States in pre-Budget meetings. The States had requested not to stop GST compensation remittances till at least 2027. However, the Centre remained unmoved.
The Union Budget would further imperil the State’s precarious economy. Central tax devolution has not benefitted Kerala. The Budget held no promise for Central government-owned public sector entities in Kerala.
Mr. Vijayan said the Budget overwhelmingly favoured disinvestment in critical national sectors, including railways, insurance and airlines.
The Centre has incrementally rolled back government influence on the country’s economy by pursuing free-market capitalism with a vengeance.
Unbridled globalisation and neo economic liberalism had cost the country’s poor dear. It had increased the income gap between the wealthy and impoverished and subverted the social security of the masses.
“The Centre’s inhumaneness is evident in the Budget”, he said. The Budget has turned a blind eye to the travails of ordinary folk and marginalised sections of society.
Social security pensions remain paltry. For one, it has declined to increase EPF minimum pension. There is no provision in the Budget to update the rural employment guarantee scheme.
The Chief Minister said the PM Gati Shakti programme to link road, air, rail and other transport infrastructure for speedy and uninterrupted passenger and freight movement has not factored in the interests of individual States.
India faced the highest inflation and price rise in the past three decades. However, the Budget offers no scheme to reach cash to the weaker sections to jump-start spending.
The allocation for agriculture, food subsidy and rural employment has stagnated. Disappointingly, there is no allocation in the Union Budget for the proposed AIIMS in Kozhikode.
The Chief Minister lauded the Centre for coopting Kerala’s “original schemes”, including digital university, online education and optical fibre network, into the Central Budget.