Policy

Interest-free deposit scheme through treasuries mooted

Our Bureau Thiruvananthapuram | Updated on July 20, 2011 Published on July 20, 2011

Special counters to be opened to accept such deposits





The State Government proposes to roll out a ‘zero interest deposit' scheme through treasuries in lieu of proposed Sharia-based banking that has failed to take off.

Special counters would be opened in the treasuries to accept such deposits, according to the Finance Minister, Mr K.M. Mani.

Distribution of dividend on the lines of Sharia-based banking would also be considered in the instant case.

BUDGETARY FLAWS

He said this while replying to debate on a motion seeking approval of demands for grant in the State Assembly on Tuesday. Tearing into the ‘irresponsible budgetary management' of the predecessor Government, he said that administrative sanction was given for many projects without backing up them with resources.

The new Government was faced with a situation where it would have had to propose either an additional taxation amounting to Rs 5,000 crore, cut expenditure or commit itself to sourcing even more loans.

The Minister faulted the predecessor Government for doing precious little to claim grants of Rs 1,063 crore through the auspices of a Finance Commission Award in return for efforts at compressing revenue expenditure.

POOR BOOK-KEEPING

Instead, the Government had gone on to forfeit Rs 812 crore on this count. Failure to furnish utilisation certificate had cost the Government another Rs 414 crore. Another Rs 240 crore was lost due to failure to come up with workable projects.

Poor book-keeping caused the Government to lose the entitlement of Rs 174 crore available for road maintenance. In this manner, the State had to write off Rs 1,614 crore at a time when each rupee saved would have amount to a gain of one.

Mr Mani said that the predecessor Government had proposed a Budget expenditure of Rs 5,066 crore in the current year's Budget but without identifying the resources.

While admitting that a sum of Rs 5,133 crore had been set apart for payment of pension arrears and pay revision, he contended that it had left behind a large number of other commitments without being provided for.

The Minister also called to question the credentials of the burdensome ‘stimulus package' totalling Rs 10,000 crore lavished in the 2009-10 Budget.

The adverse impact of this package has started unravelling, and the State finances are expected to take a hit of Rs 2,100 crore this year.

The House later passed the motion seeking a grant Rs 10,905.78 crore for defraying charges on the exchequer during August, September, and October this year.

Published on July 20, 2011
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