UDF white paper blames LDF government, Kerala Financial Crisis Center

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Thiruvananthapuram: A white paper on Kerala’s finances published by the Opposition United Democratic Front (UDF) accused the leftist Democratic Front government of having plunged the state into a severe financial crisis.

The left-wing government has failed miserably in tax collection over the past five years and caused the state treasury to lose Rs 70,000 crore, the white paper says.

While the actual amount of tax collected in 2016-17 fell short of the target by a whopping Rs 5,437.23 crore, there was a shortfall of Rs 13,492.79 crore in 2021- 2022. Loan-financed development activities are expected to generate returns in the future to enable the authorities to repay the loans. However, huge borrowing by the Pinarayi Vijayan government has left the state in a dangerous debt trap, according to the white paper.

Much of the borrowed money was used to cover day-to-day expenses. This means that the large increase in total expenditure is not due to development expenditure for the future, but to non-development expenditure with no possibility of return. Also this year, the share of development spending may decline further, he blamed.

(A white paper is an authoritative or official report that outlines issues and suggests steps to resolve them.)

“Faulty deployment of TPS, note the ban”

The white paper, which faulted the state government for failing to make proper arrangements for the collection of taxes when implementing the GST (goods and services tax), continues to blame the Center for the how the GST was implemented and its decision to ban high value currencies.

Debt per capita doubles in five years

The UDF white paper on state finances says Kerala’s per capita debt has more than doubled in five years. Till 2016, the total debt of the state was Rs 1,57,370 crore. Over the past five years, it has risen to Rs 333,592 crore. Malayali’s per capita debt which was Rs 46,078.04 has now climbed to Rs 105,000.

According to the estimate of the 2022-23 budget, the total government debt would stand at Rs 371,692.19 crore. If Rs 13,000 crore for KIIFB repayment and Rs 7,800 crore for social welfare pensions are also included, Kerala’s total debt will further increase to Rs 400,000 crore.

The government had said that the majority of the projects announced in the budget would be implemented through the KIIFB. So far, permission has been given to spend Rs 73,908 on 962 projects.

The loan that KIIFB has taken till 2021-22 is Rs 13,468.44 crore. A total sum of Rs 23,604.29 crore has been received by KIIFB in the form of loan and government assistance. He has spent up to Rs 20,184.54 crore till June 2022 and he is holding Rs 3,419.75 crore as balance.

The white paper asks how the KIIFB will be able to implement projects worth Rs 50,000 crore with this above money in its kitty.

Comprehensive report

A UDF financial planning subcommittee, led by CP John, prepared the white paper based on materials such as Assembly Questions and Answers, Responses under the Right to information and reports from the Comptroller and Auditor General (CAG).

The document, prepared ahead of the February 3 budget presentation by Finance Minister KN Balagopal, was officially released by opposition leader VD Satheesan handing a copy to Muslim League leader PK Kunhalikutty in the presence of the president of UDF MM Hassan.

Debt grew dangerously and what was happening now was prophesied by the UDF white paper in 2020, Satheesan said.

Deputy Opposition Leader PK Kunhalikutty says even ruling party MPs are complaining that no projects are being implemented in their constituencies and that the crisis afflicting KSRTC is also spreading to other businesses .

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