Minister of State for External Affairs V. Muraleedharan on November 13, 2023 termed “baseless” the Kerala Government’s argument that the Centre was primarily responsible for the State’s financial problems.
Blaming extravagance and financial mismanagement by the Left Democratic Front (LDF) government for the fiscal crunch experienced by Kerala, Mr. Muraleedharan presented a set of figures on Central transfers under various components, saying that the Centre has transferred funds in all eligible instances to the State. Funds may have been withheld in instances where the State has either failed to apply within the deadline or adhere to norms, according to him.
Lapses on the part of the State Government had led to the State losing ₹750 crore in pay revision arrears under the 7th Pay Revision Commission. The State did not keep the March 31, 2022 deadline for submitting its recommendation for receiving the money. Although the Centre had issued two reminders, the State had not responded, according to him.
The State is yet to receive ₹1,925 crore by way of capital expenditure aid for Central schemes. Failure to comply with the norms is the chief hurdle. The State should have submitted the compliance report by September 30, but it has not done so even in the first week of November, Mr. Muraleedharan alleged.
In the case of the health grant disbursed through local bodies, the Centre has so far transferred ₹421.81 crore in 2022-23. The remaining ₹137.14 crore has been withheld on the grounds that the State has not complied with the norms, he said.
‘Allocations diverted’
There are also instances where the State Government has either diverted the Central allocation for other purposes or allowed it to lapse. Of ₹13,286 crore sanctioned under the Pradhan Mantri Matsya Sampada Yojana in the fisheries sector, Kerala has spent only ₹7,855.95 crore, he said.
At the same time, the Central share of the social security pensions, including arrears, was transferred to the State last month. An amount of ₹6,04.14 crore was transferred under the widow, disability and old age pensions in this regard. The State is yet to file the application for the second instalment, he said.
An amount of ₹259.63 crore was transferred to the State in the allocations under the National Food Security Act. No arrears exist under this component, he said.
Last week, Kerala Finance Minister K.N. Balagopal had accused the Centre of launching an intensified offensive against the State on the fiscal front, adding that adverse Central policies would deprive the State of ₹57,400 crore in Central transfers and loan approvals in 2023-24.
Revenue deficit grant
Mr. Muraleedharan alleged that the State Government is misleading the public by claiming that the Centre has slashed the revenue deficit (RD) grant. RD grant is issued to 17 States as per the Finance Commission norms. Every State knows its eligibility at the start of the fiscal. Kerala is among the States that have received the highest allocations under the RD grant, according to him.
Likewise, it was agreed among the Centre and the States in 2017 itself that the Goods and Services Tax Compensation would end on June 30, 2022. The Kerala government failed to adopt timely measures to increase its own tax revenue, he alleged.
On off-Budget borrowings, Mr. Muraleedharan said the borrowing limit has been capped at 3% of the GSDP to safeguard the financial security of the nation as a whole.
“The State is facing a financial crisis on account of the extravagance and financial mismanagement of the Pinarayi Vijayan Government. The Central Government has no role in it,” Mr. Muraleedharan said.
