Date:26/03/2008 URL: http://www.thehindubusinessline.com/2008/03/26/stories/2008032651102300.htm

Back ‘Kerala’s financial position will improve soon’

Revenue deficit will be wiped out in three years

Dr Thomas Issac

Our Bureau

Kochi, March 25 Kerala’s financial situation will improve in the coming years and the State will eliminate its revenue deficit within the next three years, the State Finance Minister, Dr T.M. Thomas Issac, has said.

Welfare expenditure

The State would achieve this target without any reduction in its welfare expenditure, he said while speaking at a function organised by the Kerala Union of Working Journalists here on Tuesday.

He pointed out that the welfare schemes like pension to the poor and the needy, debt and calamity relief fund for those affected by natural disasters would continue as such.

The State is targeting a 17 per cent increase in tax revenue, while the revenue expenditure would grow at around 8 to 9 per cent. The target of elimination of revenue deficit would be achieved in three years.

However, the Government would start spending on capital investment from this year. The Government did not see any problem in borrowing for various capital investment projects like Kochi Metro Rail, Kannur Airport etc, he said.

According to Mr Issac, the quality of expenditure in most of the local departments is bad and has asked for financial discipline among departments. Generally there is a tendency to incur the development expenditure towards end of the Plan period and this has resulted in poor quality of work in certain cases.

New scheme

The Minister pointed out that the Government is considering a scheme to monitor the quality of completed work at least in one sector to start with.

Referring to the relief measures for the farmers affected by the recent summer rains in the State, he said that the Government has given a commitment of Rs 100 crore to procure the paddy that was damaged in the rains. He asked the Opposition Leader to get a commitment from the Centre on how much it would spend for the farmers.

The Minister also said that the journalists should think in terms of a welfare fund for them rather than spending money for individual schemes for the overall benefit of the journalistic fraternity. The Government is willing to support for such a proposal for the formation of a welfare fund, he added.