The Centre is trying to financially stifle States like Kerala by attempting to slash their borrowing limit, Finance Minister K.N. Balagopal said on Monday. In his reply to the discussion on the demands for grants in the Assembly, Mr. Balagopal said Kerala had received permission to borrow only ₹5,000 crore this fiscal, whereas, on an average, the State was eligible to borrow approximately ₹35,000 crore-₹36,000 crore a year.
GST compensation
The Centre is also yet to convey its decision on the demand made by the States to extend the Goods and Services Tax (GST) compensation period beyond June 30, 2022, Mr. Balagopal said. At the 47th GST Council Meeting held recently, all States, including Uttar Pradesh, Madhya Pradesh, Bihar, and Maharashtra made the demand, Mr. Balagopal said. Last year, Kerala had received ₹12,000 crore as GST compensation, according to him.
Improved tax collection
The Finance Minister said the efforts taken to improve tax collection were achieving results. Compared to June 2021, tax collection in June this year had recorded a 99% increase. Compared to the 2021 April-June quarter, tax collection during the same period this fiscal is up by 53.54%, Mr. Balagopal said.
On the other hand, tax collection had been severely affected in 2021 by the COVID-19 outbreak. ''But even then, the national average for the same period stood at 35%. So it proves that we are indeed making an effort to improve collection,'' he said.
Mr. Balagopal said the restructuring of the Taxes department had entered the last phase. The step would strengthen tax collection and curb evasion. The auditing and intelligence wings would be strengthened and equipped to handle new challenges as part of the restructuring exercise, he said.
