Kerala could face an annual revenue loss of Rs 8,000 to 10,000 crore due to the GST reforms, Finance Minister K.N. Balagopal said on Monday.
He added that in just six months of the current fiscal year, the state has already incurred a loss of Rs 5,000 crore. His remark came while attending a state-level seminar, ‘Vision 2031’, organised by the Finance Department in Kochi.
Balagopal criticised the Centre for unilaterally deciding to reduce GST rates without proper studies or discussion.
“The full benefit of the rate cuts is not reaching the public,” he said. He also pointed out that the state currently has no immediate measures to offset the revenue shortfall.
In addition to facing revenue losses from the tax cuts, Kerala is also being squeezed by strict borrowing limits imposed by the Centre. While public debt in Kerala has been stabilising, over the past five years, overall borrowing has doubled in many states. However, due to the Centre’s tight control, Kerala’s debt increase has been limited to 50 percent in the last five years. As a result, the state has lost investment opportunities worth Rs 2.5 lakh crore over five years.
Balagopal said this situation is due to the Centre’s negative stance and emphasised that Kerala has been managing its finances using its own revenue, unlike other states.
Kerala CM slams Centre’s GST hike on lottery
Kerala Chief Minister Pinarayi Vijayan on Monday said the central government’s decision to raise the Goods and Services Tax (GST) on lottery tickets has dealt a severe blow to the state’s lottery sector.
“The GST on lottery tickets has been abruptly increased from 28 per cent to 40 per cent,” Vijayan told reporters.
He said both he and Finance Minister K N Balagopal had repeatedly appealed, directly and through letters, to the Union Finance Ministry and the GST Council not to raise the tax rate.
“However, the Centre ignored all our requests, and that is what led to this steep tax hike,” he added.
