Kerala Finance Minister Sets the Record Straight: No Additional Financial Aid Received from Union Government

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Thiruvananthapuram, March 1: Kerala Finance Minister K N Balagopal has refuted media claims that the union government has provided financial aid to the state. He clarified that the funds received were due to the state as tax share and settlement of Integrated Goods and Services Tax (IGST).

Tax Share and IGST Settlement

Balagopal stated that Rs 2,736 crore in tax share and Rs 1,386 crore in IGST settlement were recently made available to the state. He emphasized that these are regular tax allocations provided to the state in installments under the budget.

Misleading Reporting

The finance minister expressed concern that such fund transfers were being portrayed as financial assistance, which he deemed misleading. He responded to media reports suggesting that the central government had offered financial aid to Kerala, which is facing a severe financial crisis due to alleged policies of the union government.

Clarification on Tax Share

Balagopal explained that the Rs 2,736 crore received was the state's share of tax revenue collected by the central government. He clarified that all states, not just Kerala, receive a proportionate share of tax collections.

IGST Distribution

Regarding IGST, Balagopal stated that it is levied on inter-state movement of goods and services and goes to the central exchequer. This amount is then distributed among the states. He emphasized that the allowance of IGST share due to the state does not constitute central assistance.

Borrowing Permission and Blocked Funds

Balagopal mentioned that the Centre had agreed to permit Kerala to borrow approximately Rs 13,000 crore if the state withdrew its petition against the borrowing limit from the Supreme Court. However, he criticized the Centre for blocking funds that could have been utilized for increased expenditures during February and March.

Kerala Finance Minister K N Balagopal's clarification on the state's financial situation aims to rectify misleading reports about central assistance. He underscores that the funds received are regular tax allocations and IGST settlements, not exceptional financial aid. Balagopal also highlights the state's ongoing challenges, including the blocked borrowing permission and the impact on increased expenditures.