As Kerala stares at economic crisis, public spending drops by ₹1,000 Cr
- The state revenue recorded a sharp fall.
- 'Things will get worse in the coming months'
- The Left parties in Kerala will form a 7,00 km long human chain to protest against demonetization in Kerala on Thursday.
Narendra Modi government’s demonetization has struck at the backbone of Kerala's revenue sources, pushing the state into a grave economic crisis. Even the Beverages Corporation, the state-owned liquor monopoly recorded a negative growth!
Finance Minister TM Thomas Isaac, a staunch critic of demonetization, told Asianet News that the state was staring at a very grave financial crisis.
"The crisis is not going to alleviate. Instead, it is going to get worse in the coming months," Isaac warned. "Currency famine persists while the RBI is not sure when they would be able to supply notes to disburse salary and pension," Isaac said.
In October this year, the total revenue marked an upward surge of 17%. We had plans to increase it by 19% in November. But demonetization dashed all hopes.
The RBI could supply only 40% of the total currency demanded by the state government after demonetization. The Sate Beverages Corporation, one of the major profit making corporations in public sector, recorded a loss of 27.3%.
Excise and Revenue departments also could not increase revenue as expected. Land registrations also dipped significantly.
“Next year, the revenue will go down further. In October this year, the total revenue marked an upward surge of 17%. We had plans to increase it by 19% in November. But demonetization dashed all hopes,” Isaac said.
However, the Minister said, the public spending also came down. The government spending dipped nearly Rs.1,000 crores in November, he added. The minister attributed the dip in expenditure to various factors including the cancellation of state lottery. "People have also reduced spending and hence, it has affected the economy. Now, everyone has started hoarding new notes, thanks to the uncertainty in the economy."
" The currency ban incurred a loss of Rs.3 lakh crores to the nation's economy. The Centre's decision to issue an ordinance making it illegal to keep banned notes after March 31, shows that the proclamation of demonetization was illegal. The Prime Minister is now trying to cover up the folly through the ordinance," Isaac who wrote a book on demonetization, said.
The Left parties in Kerala will form a 7,00 km long human chain to protest against demonetization in Kerala on Thursday.