Kerala Chief Minister Pinarayi Vijayan has said that the Union Budget 2022-23 might go to compromise an already vulnerable fiscal position of States, rather than empower it, and expressed disappointment that it hardly gave any thought to a series of demands put up by the State. 

One of the major demands was extension of GST compensation period for another five years from June this year. The Chief Minister, who is in the UAE on the way back from the US, said that tax devolution to the State or grants to PSUs have not found may major upward revision in the budget.

EPF minimum pension

The Union Finance Minister had forfeited a golden opportunity to show an empathetic face to the common man and those at the bottom of the pyramid by not increasing the EPF minimum pension, boost MNREGA or expand the scope of welfare pension for the poor and the marginalised.

Vijayan criticised the Centre’s move for divesting from the rail and civil aviation sectors. Efforts at globalising the economy has already hit the interests of the common man. The ‘PM Gati Shakti’ does not seem to have taken due cognisance of a slew of related projects proposed by the State. 

The Economic Survey had dropped broad hints about how the country might come face to face soon with the highest inflation levels in three decades. The common man can be expected to ride it out only if he is empowered financially. There is nothing that the Budget promises in this direction.

Accentuates divide

State Finance Minister KN Balagopal has said that the Union Budget has failed to come up with imaginative schemes to address the adverse impact of the pandemic on livelihood. 

If anything, the budget speech is replete with proposals that accentuate the divide between the haves and have-nots. Farmers seem to have been given a raw deal; of MNREGA, less said the better.

Balagopal ridiculed the proposal aimed at reducing minimum alternate tax on cooperatives on a par with corporates to 15 per cent. There was no income tax for cooperatives to start with, and it is not a big deal that the Centre has presently chosen to reduce it from an unconscionably high 18 per cent.

Borrowing limit cut

Another major disappointment is the allocation for vaccine development, which has not managed to find the funds it rightly deserved at a time when the country is riding a third wave of the pandemic. 

On the fiscal side, the Budget has refused to consider the demand for extending the period for GST exemption beyond June this year. Also, the borrowing limit is sought to be lowered to 3.5 per cent against the current 4 per cent. This is a very regressive step, Balagopal said. 

The State had been pressing the Centre for a special financial package in order to tide over the economic crisis triggered by the pandemic. This too has failed to find mention in the Union Budget.

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