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An editorial in the forthcoming edition of party mouthpiece Peoples Democracy has said that because of this “prejudiced” attitude of the Centre, Kerala is experiencing a serious financial crisis.
“The Modi government seems determined to thwart the LDF government’s development agenda by strangulating its finances,” it said.
The editorial said the Centre has all the powers to raise resources while the states are required to undertake development and social welfare expenditure that far exceed their revenue generating capacities.
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Citing examples, the editorial said the central government has reduced the amount of funds that can be borrowed by Kerala in the last quarter of 2019-2020.
As per the budgetary allocation, the loan should have been Rs 10,233 crore. But only Rs 1,900 crore has been sanctioned. Instead of the Rs 19,500 crore received as borrowing in the last fiscal, it will just be Rs 16,602 this year, it said.
In the place of the Rs 3,200 crore loan received in the last quarter of 2018-19, Kerala will get only Rs 1,920 in the last quarter of 2019-20, it added.
The CPI(M) also alleged that there is constant delay in receipt of GST compensation, and the state also did not receive flood compensation given to seven other states despite facing floods in August 2019.
“An additional central assistance of Rs 5,908.56 crore was granted to seven states from the National Disaster Response Fund (NDRF) for damages during the southwest monsoon in 2019, but not Kerala.
“Kerala has been one of the better performing states in implementation of the rural employment guarantee scheme (MGNREGS). However, the centre has been tardy in sending funds and arrears to the tune of Rs 1,215 crore which are pending. For payment of paddy procurement also there are dues of Rs 1,035 crore,” it said.
The party also alleged that the Union Budget for 2020-21 has further “neglected” and done injustice to Kerala.
The 15th Finance Commission in its recommendations for 2020-21 has reduced Kerala’s share in the net proceeds of taxes to 1.94 per cent from 2.5 per cent recommended by the 14th Finance Commission. Even the recommended amount of tax devolution by the commission (Rs 16,616 crore) has not been allocated in the budget. The state’s share in central tax has been proposed at Rs 15,236.6 crore as against Rs 16.401 crore received in 2019-20, it said.
“The Modi government’s violation of federal norms and hypocrisy in talking about cooperative federalism is very much on display when it comes to its dealings with Kerala.
“The LDF government and the people of Kerala are not going to take these efforts to denigrate their state lying down. They will struggle to assert their rights,” it said.