Kerala on wait and watch mode, puts off budget date

KOCHI: Kerala finance minister Dr T M Thomas Issac said the government is likely to reconsider its earlier decision to present the state budget in January.The budget would be presented only after examining the effect of demonetisation and impact of the Union budget.
The finance department is of the view that it would be advantageous for the state to present the budget in the end of February or early March.

This would give the government time to take into account the revenue and expenditure pattern in January also. The state government would need more than Rs. 1,000 crore for its payment of salaries and pensions in January.However, the RBI has informed that it can provide only around Rs. 600 crore. The state is likely to face a liquidity crisis during the salary days.

The state has been facing a decline in its revenue after demonetisation was announced.

All the major revenue heads like registration, excise, lottery, sales tax and motor vehicle tax showed a decline in November and December, that is, after demonetisation.

It is after taking into account all these factors that the state government has decided to postpone the budget. The revenue trends in January can also be taken into account for preparation of the budget.