Thiruvananthapuram: The budgetary exercise of the last few years involved fudging of accounts. The financial mess created by the UDF was the result of the failure of both expenditure control and resource mobilization, said finance minister T M Thomas Isaac after presenting a white paper on state finances in 2016, immediately after the LDF government came to power.
Public debt, said the paper, had doubled from Rs 78,673.24 crore to Rs 1,50,000 crore from 2011 to 2016. He said the LDF government would try to improve the situation by invigorating tax collection and target tax revenue growth of 20-25%. Now, with the current regime’s term winding to a close, tax collection is down and public debt has ballooned to Rs 3,20,468 crore and the UDF too has similar charges against the LDF government.
The figures simply mean that successive governments failed to address the problem of fund crunch by refusing to take hard decisions that may leave their vote banks distraught. Experts generally agree that a state like Kerala has very many limitations in exploring new revenue streams. But the state can adopt a more prudent expenditure practices.
Fifth finance commission chairman B A Prakash attributes over enthusiasm of successive governments in setting up institutions without proper research and implementing pay revisions every five years as a major cause of the financial crisis.
Former state planning board member C P John believes governments should get more freedom for fund mobilization. “The parochial view of keeping state’s borrowing limit under 3% of GDP should change. But that doesn’t mean that you can violate constitutional provisions and justify the same by saying that you did mean welfare,” he said.