The 2014-15 Kerala Budget of the Congress-led UDF Government, presented in the State Assembly on Friday, showered sops on the farm sector but failed to address the burning issue of price rise. Experts feared that the new taxes and tax hikes proposed in the Budget could lead to further rise in prices affecting both the common man and the middle class.
Finance Minister KM Mani, who presented his 12th Budget on Friday, declared schemes worth a total of Rs 964 crore in his bid to make Kerala an agriculture-based State. The schemes included an income guarantee insurance scheme, promotion of hi-tech farming with the help of agencies like the MS Swaminathan Foundation and a debt relief programme for small holders.
Constitution of cooperatives to market farm produce at the block levels and a scheme for providing loans of up to Rs 500,000 to farmers at four percent interest rate were some of the other proposals in the Budget. Mani said that 90 percent of the premium of the income guarantee insurance scheme would be borne by the Government.
Contrary to the expectation that Mani would make some proposals to bring the rising prices down and declare populist measures in the context of the upcoming lok Sabha election, he sought to raise additional resources of Rs 1,536 crore mainly by hiking taxes on almost all fronts that would directly affect not only the rich but the common man as well.
Though the Minister had started his Budget speech with complaints over the price situation, there was no significant proposal to address the issue in the Budget. Mani failed to make sufficient allocation to the schemes for market intervention by the Government. Only Rs 76 crore was earmarked for this while this was over Rs 150 crore in the current year.
The Opposition criticised the Budget saying that Mani had failed to address the issue of price rise. Former Finance minister and CPI(M) central committee member TM Thomas Isaac said the promises Mani had made in the Budget were hollow. “Kerala is in for a serious financial crisis but Mani is trying to conceal this from the people with manipulated figures,” he said.
Mani seemed to be determined to fleece the motor vehicles, transports, construction and real estate sectors for mopping up additional resources by increasing taxes and making fresh tax proposals. He intended to collect about Rs 260 crore in new taxes from the motor vehicles and transports sector alone, which would lead to increase in bus, taxi and autorikshaw fares. Intending to net an additional Rs 400 crore, Mani hiked the duty on India-made foreign liquor by ten percent.
The Finance Minister made a proposal to rationalise the compounding taxes on metal crusher units and brought manufactured sand (M-Sand) under the tax net in order to raise Rs 140 crore, which economists said would hit the real estate and construction sectors and also the ordinary people who wanted to construct houses.
He also proposed to double taxes on houses and levy on luxury houses which would bring in Rs 70 crore to the Exchequer. However, Mani sought to give some relief to the lower income groups by giving exemption to houses with a plinth area of up to 100 square metres and commercial buildings of 50 sq metres.
At the same time, he proposed a new housing scheme for the lower income group by which loans would be made available for constructing houses at four-percent interest rate to people with annual income of less than Rs 100,000 and at six-percent interest rate to those whose income was not above Rs 200,000 a year.
The Finance Minister announced a scheme to provide laptops to girls from BPl families studying professional courses. The State would fund the education for orphaned children up to Plus Two level and monthly financial assistance would be given to elders suffering from chronic diseases, Mani said in the Budget speech.