Thiruvananthapuram: Finance minister Dr T. M. Thomas Isaac said that the state government needs to repay only Rs 94,000 crore in the next seven years even if KIIFB had to be paid an interest of nine percent. “But if motor vehicle taxes grow by 15 percent annually, it alone will provide Rs 1 lakh crore,” Dr Isaac said while taking part in the discussion on the introduction and motion for reference to the Subject Committee the Kerala Finance Bill in the Assembly on Tuesday. (Last fiscal, motor vehicle taxes had exhibited a growth of 22 percent.)
Once the Finance Bill, 2018, comes into force, the fair value of land will go up by 10 percent. “It is land that offers the highest capital gains tax. So it is only fair that the fair value is increased,” Dr Isaac said.
The Finance Bill has been tabled in two parts. The second part seeks to amend the Kerala Ceiling on Government Guarantees Act. The new Bill proposes that the government will stand guarantee for five percent of the gross state domestic product. At the moment, government can stand guarantee for Rs 21,000 crore. The finance minister said that the move would assist in the expansion of the PSU.
“The FRBM legislation limits the quantum of Government Guarantee to Rs 21000 crore. There is no economic rationale in fixing such limits in absolute terms. Hence the guarantee limits shall be redefined as 5 percent of GSDP in the concerned legislation,” Dr Isaac said. However, opposition leader Ramesh Chennithala said that the amendment would only increase the debt burden of the state as these guarantees were extended to PSUs that were making huge losses. Isaac took exception to Chennithala’s argument. “You have no qualms in allowing the likes of Nirav Modi and Adani and Vijay Mallya to siphon off crores from banks,” he said. “PSUs should expand, for which they should take loans and the government should stand guarantee,” he added.