Thiruvananthapuram: Finance minister K M Mani insisted in the Assembly on Tuesday that there was no financial crisis in the state. “There is no crisis here, only distress,” the finance minister told the Assembly during Question Hour on Tuesday.
Though he ruled out a crisis, the finance minister conceded that the state was not able to achieve the kind of revenue growth envisaged in the budget. “Growth in revenue was further hindered by a fall in the central share of taxes,” the minister said.
Mr Mani then argued that the UDF government's focus on development works even when revenues were falling had put more constraints on the state's finances.
He said that as part of strengthening financial management of the state steps had been taken to mop up additional revenues. He said that the tax on various intoxicants like liquor, wine, beer and cigarettes had been increased.
CPI leader C Divakaran said that the state government was not moving a finger to recover tax arrears over Rs 23,000 crore.
The finance minister said that all unconditional stays on revenue recovery had been lifted. “Unlike in the past, stays on recovery are now granted only after extracting a deposit of 30 percent of the disputed amount,” the finance minister said.
Mr Mani said that Rs 61 crore of arrears had been collected till now this fiscal. Last fiscal, Rs 182.65 crore was collected.
Mani rejected the opposition charge that the government was on a borrowing spree. “This is nothing but propaganda. In fact we can borrow Rs 4,000 crore more from the open market,” Mr Mani said.
As part of efforts to prune expenditure from September 2014 to March 2015, the finance minister said that UDF ministers had taken a 20 percent cut in their salaries. He said that there were restrictions in the creation of new posts till March 31, 2015.
