State administration in Kerala has come to a standstill as the Congress-led UDF Government is being forced to spend its entire energy and time to justify its allegedly harebrained liquor policy envisaging total liquor ban in next ten years even as the cash-strapped State’s financial situation is getting more and more precarious by every passing day.
Senior leaders of the UDF now admit that neither the front nor the Cabinet has been able to discuss anything related to the State’s economy or other pressing affairs as their meetings could take up no issues other than the controversy over the closure of bars and the plan for total liquor ban, things over which there has never been a consensus in the Cabinet or coalition.
Since Chief Minister Oommen Chandy, due to his compulsions in the context of the so-called ego war against PCC president VM Sudheeran, had allegedly forced the UDF to adopt his idea of the liquor ban as the new liquor policy, it has become inevitable for him to defend his position at every meeting of the Cabinet and the ruling front, they say.
Similarly, Finance Minister KM Mani of the Kerala Congress (M), third biggest constituent of the UDF, is now accused of using every Cabinet meeting to conceal his inability for managing the State’s complicated finance situation by blaming Chandy for causing an annual loss to the Exchequer of over Rs 8,000 crore through the liquor ban.
“The actual loss so far on this account is only ten percent and the total loss in this fiscal is not going to exceed 20 percent of this amount. But Mani wants to establish that the reason for every financial ill is the ban. Actually, the financial position has been going off the track for over the past one year,” said a senior Congress leader known as a staunch loyalist of the Chief Minister.
What is even more alarming is that the Government, caught in the thick of controversies over the lack of collective responsibility of the Cabinet, has not so far been able to discuss the alternative ways and means through the loss of booze tax, which constitutes nearly 20 per cent of the total State revenue, can be compensated.
To make matters worse for Chandy and the pro-ban lobby in the Government and the UDF, the Finance Minister has forced the Government to cancel creation of new posts in the Government employment sector for a year, and a freeze on appointments is on the cards. Various youth organisations are already up in arms against these steps.
No infrastructure work in the Government sector is happening anywhere in the State as contractors have stopped taking up fresh jobs because of non-payment of arrears due to them, which may come to over Rs 2,500 crore. Economists warn that the State may face a total finance collapse by December unless remedial measures are taken up immediately.
Almost all the State highways coming under the Public Works Department are in an un-motorable condition but the Public Works Minister, VK Ibrahim Kunju of the Muslim league, has no solution to offer as the Finance Department is refusing to part with funds. Kunju is now saying that road repair works will be taken up when the monsoon rains abate.
Mani had taken advance tax payment of Rs 330 crore over liquor sales from Kerala State Beverages Corporation, the State-run monopoly booze distributor, after the Treasury went into overdraft during Onam. “That was an extreme step. But Mani will find it difficult to find money for even salaries and pensions from next month,” said a former Planning Board member.