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Most of revenue deficit carried over from previous years: Kerala Finance Minister

by Paul Morgan

Kerala Finance Minister Balagopal addressed the observations made by the Comptroller and Auditor General in a statement on Friday. He stated that the state’s revenue deficit is mostly carried over from previous years and that the government will decide on follow-up actions after a detailed examination by assembly committees and other departments.

Balagopal emphasized that it is the constitutional responsibility of the Accountant General to audit the state’s finances and submit observations. He rejected reports raising concerns about the government’s failure to collect tax arrears, calling them baseless.

According to the CAG report, the total revenue deficit for the financial year ended March 31, 2022, is Rs 28,258.39 crore. Balagopal clarified that this deficit has been carried over from departments like GST, KSEB, registration, and police for several years. Previous audit reports have mentioned this deficit clearly.

The Compliance Audit Report of the CAG on the Revenue Sector for the year ended March 31, 2022, was tabled in the state assembly on Thursday. The report states that Kerala’s revenue deficit was Rs 21,798 crore for the 2020-21 financial year, which rose by Rs 6,400 crore in 2021-22.

A new item has been added to the revenue deficit calculation, which includes the accumulated interest on loans given to public sector undertakings from 1970 onwards. This alone accounts for about Rs 5,980 crore, according to Balagopal.

The Finance Minister justified the government’s measures by stating that there is a reduction of Rs 420 crore in tax arrears compared to the previous year. He highlighted that usually deficits in tax departments only increase, but this year there has been a reduction, which he sees as a historical achievement.

The CAG report shows a tax deficit of Rs 13,410.12 crore for 2021-22. Kerala was able to collect about Rs 258 crore of the total amount, and further reduction was made through the disposal of appeals and amnesty, reducing the deficit to around Rs 12,900 crore. Balagopal explained that a significant portion of the deficit pertains to taxes assessed before the implementation of GST and money stuck due to stay orders.

The Minister also addressed the observations of the CAG on the social security pension issue. He explained that the production of mustering and life certificates was temporarily stalled due to COVID-19, but the issues caused by this are now being resolved. Through the use of Aadhaar and mustering, the government has effectively eliminated the names of deceased persons and duplicate entries from the list of beneficiaries.

In conclusion, the Finance Minister reassured the people that the observations made by the CAG will be thoroughly examined, and appropriate action will be taken.

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