Kerala Chief Minister Pinarayi Vijayan has criticised the Union Budget 2022, delivered by Union Finance Minister Nirmala Sitharaman on Tuesday, February 1. The Kerala CM stated that the budget has financially weakened states in the backdrop of COVID-19 instead of empowering them, and blamed the budget for not even considering state demands, such as extending the Goods and Services Taxes (GST) compensation for five years.
The states, in a pre-budget discussion with the Finance Minister in December last year, urged the Union government to pay the goods and services tax (GST) compensation for an additional five years to help them tide over the financial crisis augmented by the pandemic. The states' compensation for GST is to be paid for five years from the launch of the indirect tax regime, from July 2017 to June 2022. Almost all the states in the meeting sought the continuation of GST compensation for states beyond 2022. But it is up to the Union government to compensate for any tax revenue shortfall for the states when they switch to the new tax regime.
“There is no timely consideration regarding the Union tax share as well the financial assistance for Union public sector undertakings functioning in the state. The budget also makes it clear that the disinvestment in sectors like Railways and Aviation would continue with more vigour. The budget has ample hints for going ahead with financial policies of globalisation that caused woes for the people,” the Kerala CM said in a statement.
He also said that the budget has a negative approach towards the issues faced by the common man. “The Union government’s non-human approach is evident in the budget from its lack of consideration for the demand of increasing minimum Employees Provident Fund pension and by not revising and strengthening the Mahatma Gandhi Rural Employment Guarantee Scheme in a timely manner,” the statement read.
Pinarayi also slammed the budget for ignoring pivotal suggestions of the states, such as failing to include Kerala in “PM Gati Shakthi,” a project for interlinking rail, road and air transport. “There is no measure in the budget to provide money to people to deal with the greatest inflation in three decades. Inequality has widened during the pandemic. But there has been no move in the budget to provide financial assistance for the weaker sections to address that.”
He stated that the budget appeared to appease corporate giants while causing a certain level of harm to the interests of the people and their land. “The budget will pave the way for uncontrolled inflation, would financially strain states and would increase the gap between the rich and the poor,” the CM’s statement further read.
Kerala Finance Minister KN Balagopal has stated that the Union budget is not upto expectations, and there are no provisions in the budget to tide over the current economic crisis. "Kerala had pinned high hopes on the budget. But Kerala's demands were not considered," Balagopal said in a press meet held in Thiruvananthapuram hours after the Union Finance Minister finished the presentation.
“The third wave of COVID-19 happened at a time when the government was trying to address unemployment issues, and hence more employment opportunities were expected to be announced in the budget,” the minister said.
“The budget has ignored the commoners and farmers,” the minister said. “The allocation for the farming sector compared to the previous year is less than 1.5 %. There has been a 43 % reduction in spending for fertiliser, food and agriculture and allied activities compared to the year before COVID-19,” he said. He also slammed the budget for failing to address inflation. “The diesel cess and the petrol cess have increased 9.5 and 3.5 times under the Narendra Modi government. This was reduced to half owing to the people’s protest. The only way to rein in inflation is to bring back petroleum cess to that of 2014,” Balagopal suggested.
Opposition Leader VD Satheesan has termed the budget disappointing and the one that will make life more distressing for people, as there were no suggestions to combat the pandemic-triggered crisis. “Nirmala Sitharaman, through the budget, has made false claims about the financial situation (of the country). Revenue is generated by implementing tax atrocities and by disinvesting Public Sector Undertakings even during a pandemic,” he said.
He urged the Kerala government to step back from the semi-high speed railway project, as around 400 Vande Bharath trains have been announced in the Union Budget.