(MENAFN- AsiaNet News) Thiruvananthapuram: The Kerala government has requested the central government to allocate a Rs 24,000-crore special economic package for the state in the forthcoming union budget. Kerala Finance Minister K.N. Balagopal put forward the State's request during a meeting of State Finance Ministers, which was organized by Union Finance Minister Nirmala Sitharaman in New Delhi as part of the pre-budget consultations.
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Balagopal emphasized that Kerala, struggling with the aftermath of recurring floods and the COVID-19 pandemic, is experiencing significant liquidity stress. He stated that the state is finding it difficult to manage its finances and meet its obligations due to factors like a reduced share from the divisible pool, a lower revenue-neutral rate after GST implementation, the end of GST compensation and Revenue Deficit Grants, and new borrowing limit restrictions.
The state has also requested a Rs 5,000-crore package for the Vizhinjam seaport project in the Budget, along with approval for the SilverLine semi-high-speed rail project.
Balagopal stated that in deciding on the State's request, the Centre should consider the significant reduction in tax devolution from 3.875% under the 10th Finance Commission to 1.92% under the 15th, the discontinuation of the Goods and Services Tax (GST) compensation, and the reduced borrowing limit. Additionally, the State government has urged the Centre to increase the state's borrowing limit to 3.5% of the Gross State Domestic Product (GSDP).
The minister claimed that the railway infrastructure in the state is on the verge of breakdown due to the growing imbalance between traffic load and infrastructure. "Therefore, we urge the Union Government to increase central funding for the development of transport infrastructure, including roads, railways, metro systems, and ports, as well as urban infrastructure projects in cities and towns. Kerala also needs additional train services, as many residents work in other states and a significant number of people travel to Kerala for jobs and tourism," he added.
Balagopal also sought early approval for the semi-high-speed railway line project, SilverLine, which is pending clearance from the Centre. The minister also mentioned that Kerala is the only state that has spent 25 percent of the land acquisition cost for the National Highway widening, amounting to around Rs 6,000 crore.
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