Kerala Finance Minister KN Balagopal has castigated the Union government by terming its fiscal policies as 'damaging' to the federal structure of the country. He also targeted the opposition Congress-led United Democratic Front (UDF) in the state over "unprecedented protests" against the Left government over the imposition of cess on fuel prices, saying they were silent over the cess collected by the union government. The Congress has been organising widespread protests across the state against the fuel cess of Rs 2 imposed by the state government in the recent budget.
Addressing the media here on Wednesday, February 15, Balagopal said this was not the first time a cess was proposed in the budget. "We have not received the Goods and Services Tax (GST) compensation since June last year. The Union government has reduced the tax but its benefit was not going to the consumers but to huge corporate companies. I would like to reiterate that today the state governments in this country do not even have the power of panchayats," Balagopal said.
He claimed that the fiscal policies were 'damaging' the federal structure of the country. "States have a federal authority but that authority of the state governments has been curtailed and they took away the control over tax collection," Balagopal said.
Taking on the Congress party, Balagopal recalled that in 2015-16, the then UDF government had imposed Rs 1 as cess on fuel prices. "Similarly, this cess was imposed for social security seed fund purposes. We need to look at the situation of the state. Last two times, we did not impose any major tax due to the pandemic but announced packages of Rs 20,000 and Rs 5,000 among others," the Communist Party of India (Marxist) (CPI(M)) leader pointed out.
Justifying the cess, Balagopal said that the rise was "not exorbitant" whereas over Rs 19 was being collected by the central government. The government has said that the social security cess on Indian Made Foreign Liquor (IMFL) and on the sale of petrol and diesel were part of its commitment to continue protecting the lives of vulnerable sections of society by supplementing financial resources.
An additional revenue of Rs 400 crore is expected through the social security cess on each bottle of IMFL while an additional revenue of Rs 750 crore is expected from the cess on sale of petrol and diesel at the rate of Rs 2 per litre.