Thiruvananthapuram:Ā “This is a budget for creating a new Kerala,” Finance Minister T M Thomas Isaac said presenting the budget in the assembly for the year 2019-20.
In order to make additional revenue for rebuilding the devastated state economy after the August 2018 deluge, the Kerala government imposed a flood cess, a new tax on movie tickets (10 per cent entertainment tax) and hiked levy on beer and wine.
A one per cent flood cess would be imposed on all goods and services under GST in 12, 18 and 28 per cent tax bracket and 0.25 per cent cess on all goods, including gold, silver and platinum ornaments, under the fifth schedule of GST, on the value of supply.
The minister said this flood cess will be levied for a period of two years and it is likely to push up the cost of computers, printers, toothpastes, soaps, hair oil, cars, motor cycles, consumer durables like air conditioners, refrigerators and television sets, among others. Rs 600 crore additional revenue per year is expected through this measure.
He said barring the fifth schedule goods, there was no intention to levy cess on goods having GST rate of five per cent or below. Small dealers who have availed composition tax would be excluded from levy of cess.
Land and luxury tax rate on residential buildings will be raised fairly. Income to the state exchequer would be boosted by hiking all charges and fees for services by various government departments.
In order to address increasing air pollution caused by vehicles, the Finance Minister also announced a 25 per cent tax concession for electric vehicles for five years in a way to promote them.
A major share for infrastructure development, general education and health sector were set separately and all welfare pensions were increased:Ā The budget earmarked Rs 2,500 crore for agriculture to rejuvenate the sector from flood disaster, Rs 1,406 crore for the health sector and Rs 992 crore for general education.
Rs 100 crore was allocated to the Travancore Devaswom Board to meet revenue loss suffered by the Sabarimala temple due to the floods and protests by right wing groups and devotees over the women’s entry into the shrine issue.
An alternative to the Centre’s Ayushman Bharat scheme was also announced during the budget. . A two per cent increase in the tax rate on first sale of all kinds of foreign liquor is expected to mobilise an additional revenue of Rs 180 crore.
A total of Rs 200 crore additional revenue is expected by levying a one time tax of one per cent on new motorcycles, cars and private service vehicles used for private purposes.
Detailing the rebuilding initiative programmes, Isaac said there has been an estimated income loss of Rs 25,000 crore after the August floods and proposed 25 new projects to bring the state back to its feet.
An amount of Rs 3,229 crore has been received so far in the Chief Ministers Distress Relief Fund, of which Rs 1,732.70 crore has already been spent. He said that Rs 1,000 crore has been alloted for the ‘Rebuild Kerala’ initiative in the plan.
Among other allocations are Rs 500 crore for the support price of Rubber, Rs 1000 crore for development of coastal area, Rs 1,781 crore for energy sector, Rs 1,367 crore for the Public Works Department and coastal highway with the financial aid of Rs 6,000 crore from Kerala Infrastructure Investment Fund Board.
The cash-strapped Kerala State Road Transport Corporation would get Rs 1,000 crore in 2019-20 as government assistance for its restructure. Isaac said the total budget outlay has been pegged at Rs 1.42 lakh crore, while the expected plan outlay has been raised to Rs 39,807 crore from Rs 32,564 crore, Isaac added. He said the estimated revenue deficit was 8,720 crore.
The opposition Congress-led UDF, however, hit out at the government, saying the budget promises were hollow and disappointing.