Demonetisation, Goods and Service Tax (GST), and Kerala Infrastructure Investment Fund Board (KIIFB) are likely to be the three key markers of his speech as Finance Minister T.M. Thomas Isaac tries to get the seemingly sluggish State economy back on the growth path and raise sufficient funds for infrastructure development, pay revision, and social sector, particularly healthcare and education.
Over the past few days, the Finance Minister had been speaking loud and clear about his intentions: work hard to make GST roll-out in the State a success so that he gets enough money to foot his development bills. The Finance Minister is hoping to rake in quite a tidy sum once the GST is rolled out on July 1 or not too later than that.
A corollary to this is the possibility of the budget not containing any taxation proposal and the Finance Minister looking at ways to increase non-tax revenue some way or the other.
The political dimension of the budget speech would in all probability be dominated by the Finance Minister’s critique of demonetisation. Incidentally, he was in the forefront from November 8 night tearing the demonetisation decision to pieces, noteworthy because there was clear confusion at the top level of government on whether or not to take on the Central government on the issue. A committee constituted by the State Planning Board subsequently had proved his criticism was spot on.
The Finance Minister is likely to explore ways to harvest at least a portion of NRI deposits for the State’s development, possibly by offering attractive returns for participation in chit schemes of the Kerala State Financial Enterprises (KSFE) and channelise such funds to the KIIFB.
In the social sector, the Finance Minister could be expected to look at the need for more professional hands in health and education sectors. This could well result in proposals for enhancement of staff strength in hospitals and medical colleges, besides extension of service of at least some sections of professionals.
True to his style, the Finance Minister is certain to place emphasis on the green and gender aspects of the budget with a few innovative announcements. Another pay revision is due and how the Finance Minister seeks to address that huge fiscal challenge would be watched intently by both the potential beneficiaries and economy watchers.