Cash-strapped Kerala enhances fair value of land, motor vehicle tax; hikes welfare pension

PTI
Friday, 7 February 2020

"The tax rate of motorcycles, not exceeding value up to Rs 2 lakh, will be increased by 1 per cent and that of motor cars and private service vehicles for personal use, not exceeding value of Rs 15 lakh, will be increased by 2 per cent," the minister said detailing the motor vehicle tax hike.

Thiruvananthapuram: Battling severe financial crisis, the Left government in Kerala on Friday raised the fair value of land and motor vehicle tax to mobilise an additional resource of Rs 1,103 crore, even as it raised all welfare pensions and allocated enhanced share for pro-women schemes.
 
A total of 2.5 lakh new water connections, 1000 cost-effective food courts providing meals at Rs 25, one lakh new houses/flats for homeless people by 2020-21 and 'she-lodge' enterprises in all cities were among the popular announcements in the budget, presented with an introduction of the state's cash-strapped condition.
 
Presenting his fifth budget for the 2020-21 fiscal, state Finance minister T M Thomas Isaac announced Rs 2,000 crore and Rs 1,000 crore worth special packages for flood-hit high ranges-- Wayanad and Idukki-- respectively.
 
The minister set aside Rs 1,000 crore for coastal area development and Rs 2,400 crore for the second Kuttanad package, eyeing the development of the 'rice bowl' of the southern state. 

"The tax rate of motorcycles, not exceeding value up to Rs 2 lakh, will be increased by 1 per cent and that of motor cars and private service vehicles for personal use, not exceeding value of Rs 15 lakh, will be increased by 2 per cent," the minister said detailing the motor vehicle tax hike.
 
A total of Rs 200 crore additional revenue was expected through this measure, Isaac said.
 
Another Rs 250 crore was planned to be mobilised by making an increase of 10 per cent in the existing fair value of land and hiking the fair value of notified land near large-scale projects at a maximum of 30 per cent. 

The annual luxury building tax, levied on residential buildings, was revised under four slabs, expecting an additional revenue of Rs 16 crore.
 
By imposing a fee of Rs 200 for issuing location map and Rs 100 for issuing Record of Right (thandaper) by village offices, an additional revenue of Rs 100 crore is expected, the minister said.
 
"The expected gain in GST collection has not been materialised....recession has also adversely affected tax collection. It is expected that there will be a shortfall of Rs 10,113 crore in the anticipated tax income of this year," Isaac said.
 
Even amid the crisis, the Left minister showed special attention to enhance various welfare pensions, given by the government. 

"The previous government had disbursed Rs 9,311 crore for welfare pensions. Now, on completion of its fourth year, the LDF government has crossed Rs 22,000 crore. 

Social security pension has been given to 13 lakh old age people...all welfare pensions are enhanced to Rs 1,300 (which is Rs 1,200 now)," the minister said. 

Against Rs 760 crore during the year 2016-17, the total outlay for schemes for women was enhanced to Rs 1,506 crore in the present budget, which is 7.3 per cent of the plan outlay, Isaac said. 

"If the special component for women in other 50 schemes is also taken into account, the total share for women will come to 18.4 per cent," he said. 

With the commencing of the third stage of Life Mission, an ambitious housing project of the CPI(M)-led LDF government, in 2020-21, 40,000 houses would be made available to the scheduled community and fisherfolk, he said. 

As part of cost cutting, curbs would be imposed on the purchase of new cars by government departments and restriction would be imposed on the creation of new posts.
 
In his two-and-half hour budget speech, Isaac attacked the BJP-led NDA government at the Centre for reducing central assistance and excluding the southern state from flood relief assistance of 2019. 

Alleging that the aim of the Centre's economic policy was to "strangle" the state government financially, he said the state's borrowing limit had been reduced besides central grants cut short.
 
The state's share of GST compensation for December was yet to be paid, besides huge amount was pending to be released from centrally sponsored schemes.
 
There will be a total shortfall of Rs 8,330 crore in the central assistance, including loans, for January, February and March 2020 and this has put unprecedented financial constraints on the state exchequer, the minister said. 

The cumulative deficit at the end of the year was pegged at Rs 98.80 crore, the minister added.  

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