The government’s spending on infrastructure is likely to take a hit for the second consecutive year with the earnings of the Kerala Infrastructure Investment Fund Board (KIIFB) through motor vehicle tax and fuel cess registering a negative growth.
KIIFB’s provisional data for the 2021-22 fiscal show that it received the lowest amount of petroleum cess in the last fiscal after 2017-18 and the lowest motor vehicle tax after 2018-19, indicating a drop in fuel consumption in Kerala in the past two years.
As per the KIIFB (Amendment) Act, 2016 10% of motor vehicle tax is set aside for KIIFB in 2016-17, the share will increase by 10% every year until it reaches 50% in the fifth year.
The KIIFB share of motor vehicle tax has reached the 50% limit in 2020-21. However, the motor vehicle tax collection in 2021-2022 was lower than the previous year.
KIIFB has received ₹10,135.85 crore over the past six years as share of motor vehicle tax and fuel cess. In 2020-21, the government provided an additional grant of ₹322.07 crore following a dip in motor vehicle tax collection and fuel cess in the wake of the pandemic outbreak.
However, the latest statistics indicates that even after the economy showing signs of recovery after the peak of the pandemic, motor vehicle registration and fuel consumption are yet to reach normalcy.
Though KIIFB sources say there will be a slight variation in the provisional figures of last fiscal after auditing, it is unlikely to get into the growth track. The slump in consumption of fuel and motor vehicle registration will not last too long and once the economy is back on the rails, the pre-pandemic growth rate can be achieved.
The drop in KIIFB earning is a cause for concern for the State as KIIFB is the main fund mobiliser for infrastructure projects.
KIIFB has sanctioned over 965 infrastructure projects worth ₹76,000 crore to date, while it had disbursed ₹19,202 crore. At the same time, it had availed loans of ₹13,465 crore up to now of the total ₹16,909 crore sanctioned by various agencies. So any fall in fuel cess or motor vehicle tax collection will upset the infrastructure plans of the State, say experts.
