The biggest problem the lDF Government that is taking charge in Kerala on Wednesday is going to face is the State’s empty coffers, economist Thomas Isaac who is expected to become the State’s Finance Minister has said. The new Government would issue a White Paper on the State’s economic situation, Isaac, who was the Finance Minister in the 2006-11 lDF Government, said in Thiruvananthapuram on Monday.
“The State is going through a financial crisis that equals the one it faced 15 years ago,” he said. “The situation is such that almost 70 per cent of the money being borrowed is being used for daily expenditures. There has been considerable slide in the capital expenditure. Such matters need a comprehensive examination,” he said.
Stating that only 51 per cent of the development projects had been implemented in the past few years in the name of lack of funds, he said he did not have any magic wand with him for enhancing revenues. The problems in tax administration could not be solved “in a day”, Isaac said, adding that results would begin showing only in a year even if steps were initiated now.
A new development culture by which the benefits percolated to the poorer sections needed to be brought about in the State, Isaac said, adding that some divergences might be needed in this aspect. Isaac claimed that the there had been no fall in the State’s revenue from the liquor sector because of the Prohibition-in-ten-years booze policy of the outgoing UDF Government.