THIRUVANANTHAPURAM: This festival season, the Kerala government has pumped more money into the economy hoping for its revival amid the pandemic. Onam, the biggest festival season in the state is also the time when tax and non-tax revenue earnings go up.
The financial year’s beginning saw the tax revenues collapsing due to the Covid-19-driven lockdown and the economic slowdown.
The collections in April, May and June were Rs 370 crore, Rs 692 crore and Rs 1,264 crore as against the previous year’s figures of Rs 1,699.25 crore, Rs 1,574.48 crore and Rs 1,730 crore respectively.
However, a comparison of the three months signals an early recovery prompting the government to infuse more money into the economy. The GST collection in April was 21.77 per cent of the collection in April 2019 and it rose to 43.95 per cent in May and 73.06 per cent in June.
According to the Finance Department, the advance payment of the salary and pension to government employees and social security pensions would boost the festival market. The government employees are given a handsome bonus as well.
“Kerala’s policy is to spend big to tide over an economic crisis like this. The finance minister had clearly stated this when the slowdown worsened last year. Kerala’s Rs 20,000-crore Covid-19 relief package reaffirmed our position on this. Now the festival spending is a continuation of that,” said a senior officer in the Finance Minister’s office.
The government is spending Rs 3,200 crore for salary and pension and another Rs 1,650 crore for social security pension payment. The social security pension for August and September is being distributed in advance. Bonus to government employees would cost around Rs 350 crore.
The distribution of free Onam kits to 88 lakh families and special kits to the less-privileged, a pandemic relief measure that doubles up as market intervention, would cost Rs 1,200 crore.
The cash-strapped government has availed of an overdraft of over Rs 2,000 crore to meet the festival expenses besides utilising the monthly fiscal deficit grant from the Centre which would come around Rs 1,241 crore. Lotteries department, a major non-tax revenue earner, is on a recovery path.
Its prestigious Thiruvonam Bumper is evoking a good response in the market, officers said. 10.60 lakh of the total 18 lakh tickets were sold till Friday as nearly a month is left for the draw. But the pandemic will have a serious impact on the sales turnover this year.
The near Rs 12,000 crore target set for this fiscal is hard to achieve, according to the department.