In the Budget for 2024-25 tabled in the state assembly by Finance Minister K N Balagopal, the state’s fiscal deficit is projected to be 3.4% for FY25.
Kerala’s Left Democratic Front government on Monday announced an intention to implement ‘assured pension system’ for employees to address their insecurity in the market-determined National Pension System (NPS), and increased excise duty on liquor and court fees to augment resources.
In the Budget for 2024-25 tabled in the state assembly by Finance Minister K N Balagopal, the state’s fiscal deficit is projected to be 3.4% for FY25, only marginally down from 3.45% in FY24, reflecting a tight financial condition.
The state’s capex is estimated to be Rs 17,826 crore in FY25, up 5% on year while revenue expenditure is estimated to be Rs 1,66,501 crore, up 10% on year.
To mobilise additional revenues, the budget proposed a hike of Rs 10/ litre in excise duty on Indian-made foreign liquor (IMFL) and an increase of 15 paise per unit in electricity duty for consumers who generate and consume energy for their own consumption.
The state government is estimated to generate additional revenue of Rs 224 crore through these measures. Balagopal later clarified that the levying of gallonage fee on IMFL sales would not be passed on to consumers.
Finding other ways to raise the government’s receipts, the minister said suitable amendments would be made to The Kerala Court Fees and Suits Valuation Act, 1959 whereby it would earn an additional Rs 50 crore.
The government provided a nominal increase of Rs 10 in the minimum support price for rubber — a major cash crop of the state — enhancing it to Rs 180 from Rs 170 earlier.
“The government is planning to review the NPS and implement a revised scheme that will provide security to the employees. Necessary action will be taken to get back the share given to the central government,” Balagopal said presenting the fourth budget of the second Pinarayi Vijayan government.
A few states in the past including Rajasthan and Chattisgarh had announced the return to the old defined benefit pension scheme (OPS) when these states were ruled by the Congress. Their demands for the return of the NPS corpus were rejected by the Pension Fund regulatory and Development Authority as these funds belonged to employees.
According to extant NPS norms, a minimum of 40% of the accumulated NPS corpus from contributions during a person’s working years (the government and staff contribute 14% and 10% of pay, respectively) must be invested in annuities to generate a monthly pension, which is linked to annuity returns and not guaranteed. The balance of 60% can be withdrawn, which is tax-free.
Source:financialexpress.com