Kerala Finance Minister K.N. Balagopal presented the State budget for 2024-25 on Monday, proposing a deficit of ₹273.94 crore, after accounting for ₹1,067 crore in additional resource mobilisation and ₹1,420 crore in additional expenditure. Most tax heads and the pet theme of welfare pension were untouched, while fees/ levy were revised, and a gallonage fee of ₹10 per litre of IMFL was introduced afresh. The Finance Minister raised the support price of rubber by ₹10 to ₹180 “despite financial constraints.”

War of words 

The Budget came in the backdrop of a raging war of words between the State and the Centre over borrowing limits and share of taxes from the divisible pool. This has now been escalated to the Supreme Court, with the Centre arguing the state’s financial difficulties stem solely from its own mismanagement. The request to raise borrowing limits is to sustain its day-to-day spend. Chief Minister Pinarayi Vijayan will lead his colleagues, MLAs, and MPs to join a protest march in Delhi on Thursday. 

The neglect towards the State cannot be left without a mention, Balagopal said in the Budget speech made in the State Assembly. “Justice is being denied to Kerala not only in taxes, but also its borrowing entitlement as per the Centre’s own criteria,” he said. “As per the Centre’s guidelines, Kerala’s eligible borrowing limit is ₹39,626 crore, based on which the State Budget was prepared. But it has been allowed to borrow only ₹28,830 crore till now. The borrowing limit was cut short mid-fiscal without any prior notice, based on improper calculation of public account balance.”

Electricity duty revised

Balagopal proposed a revision of electricity duty collected at the rate of 1.2 paise per unit to 15 paise per unit to raise ₹24 crore. Also, he said from 1963 onwards, electricity duty for sale of electricity has been levied at the rate of 6 paise per unit. This would be enhanced to 10 paise per unit, which is expected to bring in an additional ₹101.41 crore. A streamlined salvage and scrapping policy will be evolved to enable different departments to “unlock value through disposal of unusable assets such as old furniture and condemned vehicles” to mobilise ₹200 crore. A similar amount is to be mobilised by revisiting the idea of removal of sand from rivers, which will help raise their carrying capacity and lower the risk of riverine flooding, the Finance Minister said. 

Capturing mortgage securities 

The budget proposes capture of securities employed by banks for lending to the state’s revenue records and recording mortgages on the ReLIS portal of the Land Revenue Department. This is expected to raise ₹200 crore. Banks would be required to fork out a fee of ₹1,000 for ‘E-marking’ mortgages in the database and ₹300 for ‘e-releasing’ them. To prevent undervaluation of buildings, norms will be formulated to fix their value based on the plinth area at CPWD rates, Balagopal said. New guidelines will be issued to verify that stamp duty paid is on a value not less than that determined using these criteria. Necessary amendments will be introduced in the Kerala Stamp Rules, 1960. This measure is expected to raise ₹100 crore. 

Deposit of title deeds

In order to curtail wrongful practices and to bring transparency, and as an interim measure and in exercise of the executive power of the government, an order will be issued for compulsory online filing of agreements relating to the Deposit of Title deeds in the Sub-Registrar’s offices. A filing fee of 0.1 per cent of the loan amount subject to a maximum of ₹10,000 will be charged from the financial institutions for this. This is expected to bring in an additional revenue of ₹50 crore, Balagopal said. 

Stamp duty revision

Judicial court fee stamp has not been revised over the past two decades. These will be suitably raised to raise ₹50 crore. The Kerala Stamp Act, 1960, will be amended to fix the stamp duty based on the fair value of leased land, instead of the annual average rent. Along with this, the existing stamp duty slabs for lease deeds will also be revised to mobilise ₹40 crore. The Kerala Stamp Act, 1959, will be amended to provide for levy stamp duty at the rate applicable to a sale deed on transfer of immovable property when existing partners intend to transfer property to new partners with reconstitution/dissolution. 

DA/ DR instalment

Proposal to pay out one instalment of DA/ DR to government employees/ pensioners, along with the salary/ pension for April, led the list of major give-aways. The Budget referred to loss of tax and registration fee from Centre’s implementation of new tourist permit on buses plying in Kerala state. To facilitate registration of such vehicles in the state, the budget proposed a decrease in tax with respect to vehicles with an All-India tourist permit. Similarly, it proposed an ‘Amnesty 2024’ tax arrears resolution scheme ‘to invigorate the trade sector in the state, especially the small-scale trade sector. ‘ 

Related Topics
comment COMMENT NOW