TRIVANDRUM, 19 June — Kerala is currently facing a staggering monthly deficit of two billion rupees as well as total liabilities of 34.77 billion rupees, says a white paper released by Chief Minister A.K. Antony government with a warning that the people might have to pay more for electricity, bus travel and children’s education.
Releasing the 116-page document yesterday, Antony said that “some hard measures” would have to be taken urgently to reverse the dismal situation. “If immediate decisions are not taken the position would become irreparable and the future would soon become irretrievable also,” he said.
The state requires 9.44 billion rupees per month to pay salaries, pensions, repayments and grants, while the revenue generated is 7.44 billion rupees from sales, excise and motor vehicle taxes and non-tax revenues from forests and other areas.
Observing that sacrifices by the people would be “a small price to pay for the well being of our future generations,” the white paper says the government would introduce new policies to bring the state economy around. The state’s liabilities include 6.42 billion rupees owed to various cooperative banks, 8.20 billion rupees to government contractors and 5.07 billion rupees for infrastructure investment.
This alone bears an annual interest of 700 million rupees. “We are going to place this white paper before the people of Kerala and also financial experts. In a period of two weeks we would receive comments from everyone and then a damage control exercise would be resorted to,” Antony said. Antony said that certain remedial measures like increasing power tariff by about 90 percent and bus fares were under consideration. “A final decision on this aspect would be taken only after we hear the opinion of all people,” he said.
The other major debt obligations of the state are five billion rupees owed to the treasury, 2.10 billion rupees to clear salary arrears of class 12 teachers, 2.10 billion rupees to the Kerala State Civil Supplies Corporation (KSCSC) for supplying items for the government’s much touted noon meal scheme, three billion rupees to clear outstanding amounts to travel allowances, lottery prize money, incentives to national savings agents, welfare pensions and 310 million rupees to various companies for supplying medicines to state health departments and medical colleges.
Not included in the liabilities list is a 2.10 billion rupees default to the Housing and Urban Development Corporation (HUDCO). The white paper also discusses the options before the government and points out that 14.35 billion rupees could be raised through various measures, including 7.5 billion rupees through taxes, 500 million rupees through raising educational institution fees.
It also points out that one billion rupees could be raised by restructuring public sector units and 2.6 billion rupees by intensive mobilization of investments in national savings. It has also recommended that 9.75 billion rupees could be saved annually through strict cost cutting measures.
