'Kerala can not implement budget proposals'

Thiruvananthapuram, May 23: Kerala Finance Minister T M Thomas Issac today said the state government which was facing a financial crisis was not in a position to implement even one-fourth of the plan size presented in this year's budget, and put forward three options for tackling the crisis.

''There are only three options that is being put forward for the people to discuss and come out with a viable alternative for tackling the economic crisis faced by the state. The first option is to curtail the plan funds for several programmes like development activities and the other option is to ask the Central government to remove the provisions in the Act 293 which bars the state government from borrowing money. The last option is that the policies of the Centre should be changed, especially with regard to VAT,'' he told reporters at a press conference here.

The government put forth these three options before the people to think and discuss, he said and asked the people to come out with a concrete proposal to overcome the present crisis. Unless a consensus was arrived at, it was very difficult to move forward, he said.

Alleging that the previous United Democratic Front (UDF) Government had created such a crisis to the state exchequer, he said about Rs 4000 crore deficit was calculated at implementing the proposals presented at the Budget presented by the UDF government.

Even if the revenue of the state increased as said in the Budget, the government was in such a situation that about 60 to 70 per cent of the plan should be cut, he added.

The UDF government had presented an inflated budget and included Rs 6,450 crore towards different projects in the budget without taking into consideration the financial position of the state exchequer. The UDF government had taken such a decision by thinking of drawing Rs 7,000 crore as loan. ''But the Centre had instructed the state government that under Act 293, the state government could only borrow Rs 4672 crore.'', he charged.

Pointing out that the UDF government had not earmarked money for certain projects that they had implemented, he said no money was allocated in the budget for implementing the new pay revision for the state government employees.

There was also no proposal for giving away the pension arrears and also for giving rice at Rs three a Kg to people under the Below Poverty Line, he said.

Mr Issac said For implementing the pay revision the government needs Rs 1500 crore. The budget has only allotted Rs 1135 crore towards this. It has now been estimated that the government should have to find out Rs 900 crore for giving the revised salary. For giving away the pension arrears and also for the rice scheme for the BPL families, the government needs an additional Rs 340 crore,'' he said.

Apart from all these, there are dues for the contractors which amounts to Rs 1200 crore, he said and added the government was not in a position to borrow money from the Centre or from any other agency as the Centre itself had said that the state government could only borrow Rs 4672 crore.

Refuting UDF's claims that the balance in the government treasury as on May 17 was at Rs 290 crore, Mr Issac asked how could the cash balance of a day be said to be the balance of a government.

''It is obvious that in treasury, some days there would be cash balance. But how is it that it could be said to be the balance of the outgoing government. Already Kerala has more than Rs 45,000 crore debt and if a government says that it has balance then it is not a good fiscal management.'' Asked about calling private investors into the state, he said private investors were welcome but there should be a transparency in all the projects that wold be implemented. There were several factors like social, environmental and other concepts that should be taken into account before welcoming a private investor. For attracting Non Resident Indians to invest in the state, he opined that there was a need for concrete and viable projects for attracting them.

UNI