Chandigarh : Kerala’s FY23 state budget has taken into account Goods and Services Tax (GST) compensation from the central government for the entire year and not just till June, state finance minister KN Balagopal said while expressing optimism that the state The demand for compensation from governments beyond June will be received by the GST Council. Approval.
Balagopal’s optimism about the Center agreeing to expand fiscal support for states’ GST-implementation-related revenue shortfalls is in line with similar expectations of finance ministers of some other states. Delhi and Chhattisgarh have also demanded extension of GST compensation beyond June, when the existing scheme expires. GST compensation was originally envisaged only for the first five years of GST, which gets completed by the end of this month.
“Our budget is for the whole year. We have prepared the budget with the presumption that GST compensation will continue… We are hoping that compensation will continue as it is a matter of natural justice. We are seeking an extension of five years,” Balagopal said in an interview.
The GST Council is likely to consider these demands on Wednesday.
Balagopal said that the state is not shying away from spending on social and infrastructure sectors despite the recent floods in the state and the economic loss caused by the Covid pandemic.
The minister said that Kerala is not trapped in any debt trap and its financial problems are like any other state. “Kerala is not facing any debt trap. Every state is facing some or the other financial problem due to the COVID pandemic. In the case of Kerala, we have also faced floods in the recent past. Our problems are no different from other states. In addition, the economy is facing tensions around the world. It also contributes to the problems of the states.”
The minister said the state has not shied away from its responsibilities and has distributed free kits containing food and other material to the people to provide relief as income was affected due to the lockdown.
“We are not putting a moratorium on any of these essential spending…we are investing in education in a big way. We are trying to give impetus to the economy by focusing on knowledge based sectors. We are developing educational institutions and infrastructure,” the minister said while explaining how the south Indian state is supporting economic recovery.