Clever Mani farms goodwill

Thiruvananthapuram: On paper, finance minister K.M. Mani has nearly done what was generally considered impossible. He has given the long-struggling primary sector a massive boost and, without really taxing the common man, has promised to conjure up record additional revenues of Rs 1,556 crore. In short, he has penned a smartly-worded love letter to voters on the eve of the Lok Sabha elections.

But the problem with Mani is he is not good at keeping his word. He has fudged the revenue deficit figures of 2012-13. The actual revenue deficit for 2012-13 is 175 percent more than Mani’s estimate, an unprecedented variation. The same jugglery is found even in his latest budget.

In his presentation on Friday, Mani stated that the revenue growth for 2013-14 was only 11 percent but later on, in generally ignored budget documents, he shows that the revenue receipts for the fiscal have grown by 24.5 percent. The latter figure helps to give his yawning deficit a compact look.

But if the budget is taken as nothing more than a document of intent, Mani has his heart in the right place. He is resolute than any predecessor to save a sinking primary sector, which holds the key to the state unemployment problem. More than 30 minutes of his two-and-a-half-hours speech was devoted to innovative schemes and incentives for improving farm productivity.

The bigger puzzle for Mani was to arrest falling revenues when elections are round the corner. He tries to tackle it deftly, not treading on toes of the common man.

He mostly tapped areas left untouched for the last 17 years (the relatively insignificant building tax charged by the revenue department, tax on taxi cabs and autorickshaws) and never-ever touched ones (caravans and generator vans).

He was careful not to tamper with the tax rate of cargo vehicles, crucial for the transport of essential goods, but would still collect an additional Rs 116 crore from them as tax in the coming fiscal.
Lumpsum tax is his magic wand.

These vehicle owners, instead of paying taxes every three months, have been asked to pay a lumpsum tax for five years. However, he has pinched owners of tourist taxis and luxury taxis by hiking their tax and then asking them to pay 15 years of tax upfront as lumpsum, hoping to mop up Rs 80 crore in the bargain.

Mani’s biggest gain of Rs 400 crore will come from taxing costly Indian Manufactured Foreign Liquor. He will get another Rs 100 crore by charging a two percent turnover tax on textiles with a turnover of more than Rs 1 crore. He could have imposed a 5 percent VAT on textiles but he opted for turnover tax as it cannot be easily passed on to consumers.

The only measure that could impact people in a big way is the increased VAT on M-sand and rubble. If the construction sector is hit then the purchasing power of the vast lower middle class will be affected.

Next: Rs 5L interest-free loan to farmers

Rs 5L interest-free loan to farmers

Kochi: A state budget has never been so good for agriculture like the latest one presented by Finance Minister K.M. Mani which promises to spend Rs 200 crore as incentives for promoting hi-tech farming. It’s clearly aimed at reducing the state’s dependence on other states for vegetables and fruits and also to boost the economy by giving farming a fillip and creating jobs.

The minister himself said that the budget was intended to convert Kerala into  a hi-tech agriculture state. The Rs 5 lakh interest-free loan to small farmers for hi-tech farming and incentives like insurance for agriculture produce and health insurance for family members of farmers are expected to go a long way in fulfilling his dream.

“The budget will ensure that in four to five years, Kerala will be in a position to meet 80 to 90 per cent of its demand for vegetables internally. It’s after a long time I have seen a budget so good for the agri sector,” said Sivadas B. Menon, managing director of Sterling Farm Research & Services, and one of the pioneers of hi-tech farming in the state.

The last budget of Mani, as Menon said, did the groundwork for this one. Around 650 green houses have sprung up in the state in the last one year alone. The plan of the government is to have around 3,000 green houses in the state with a minimum of three in each grama panchayat.

Though the current schemes were intended to help small farmers in setting up hi-tech farms, this could be extended to large land-holders and corporate farm houses, Menon said. “Kerala is 10-12 years behind some developed states in promoting hi-tech farming. But it’s better late than never,” he added.

Next: Travel to cost more in state

Travel to cost more in state

Kochi: Travelling is  set to be a costly affair for Malayalis as the budget presented by Finance Minister K.M. Mani on Friday sought to mop up an additional Rs 260 crore revenue from the motor vehicles and transport sector alone.

Not only the affluent, but also the common man would have to pay more to travel as the tax for autos and taxis has been hiked for the first time in the last 17 years.   The auto and taxi drivers would go on a statewide strike on January 28 to protest against the  hike.

Interstate private bus operators say they would be forced to increase  the ticket price by 10 to 20 per cent as these buses would have to remit Rs 1,000 per sleeper seat from now onwards. “We have to pay around Rs 40, 000 additional tax a year,” said a spokesman  of inter-state bus operators.

Already, the passengers are coughing up over Rs 1,000 for travelling from Kochi to Bangalore instead of Rs 500 in a KSRTC bus. Besides,  the private and goods carriage vehicles above 1,500 CC would have to remit luxury tax. The government is also considering hiking the minimum bus fare after the fare revision committee headed by Justice Ramachandran had recommended an increase to compensate the rising fuel prices.