Kerala FM attacks Centre on economic policies

Kerala Finance Minister K N Balagopal on Thursday lashed out at the BJP-led government at the Centre over its economic policies, which he alleged were financially crippling the southern state and destroying the federal structure envisaged in the Constitution. While making a statement under Rule 300 in the state Assembly, he said the Centre, over the past few years, has been making relentless efforts to 'undermine' the federal economic system envisioned by the Constitution of the country and stressed the need to protect the interest of Kerala.

The senior Marxist leader listed out various alleged means employed by the union government to subjugate the states financially.

According to him, the Constitutional provisions are being misinterpreted by the NDA government to adversely impact the interests of the states and central fund transfers have been slashed through the Finance Commission and other means.

He also alleged that various central agencies especially the regulatory agencies like the Comptroller and Auditor General (CAG), the Income Tax Department and the Enforcement Directorate (ED) are being misused to bring the states under the control of the central government.

Charging that many such attempts amounted to scuttling the progress of Kerala, he said the state is facing an ''extremely stressful financial situation'' due to the continued neglect of the Centre.

The ''financial health'' of Kerala has been seriously impacted by the reduction of approximately Rs 7,000 crore in the revenue deficit grant by the Centre and its refusal to give the GST compensation of over Rs 12,000 crore to the state.

Besides this, the borrowing limit of the states has been reduced to 3.5 per cent, he claimed. To make things worse, the guarantee given to special purpose vehicles like Kerala Infrastructure Investment Board (KIIFB) and the Kerala State Social Security Pension Limited (KSSPL) have been defined as the state government's debt, he added.

''Over Rs 14,000 crore is now accounted as the government's debt this way. As a result, there has been a reduction of Rs 3,578 crore in Kerala's borrowing capacity,'' the minister added.

The Centre's policies are adversely affecting the state's development plans and the spending capacity in the health and education sectors and for welfare projects, he said adding that as a finance minister, he would soon send a letter to his central counterpart pointing out such gross violations of federal financial structure enshrined in the Constitution.

He also appealed to the legislators of the House to be vigilant about the present situation in which the basic tenets of the Constitution are under serious attack.

The Centre's attempt was to undermine the federal system without respecting the essence of the Constitution and to sabotage the financial powers of the states by misusing various agencies under them, Balagopal further alleged.