Union Budget 2017: Some reasons for Kerala to cheer up

In a quick reaction to the Union Budget 2017, Kerala Chief Minister Pinarayi Vijayan regretted on Wednesday that the Finance Minister did not do justice to the state as all the pre-budget proposals submitted by the state were turned down. State Finance Minister Thomas Isaac also slammed the budget and felt the indifference of the Centre would push Kerala into deeper financial troubles. 

But a close reading of the budget presented by FM Arun Jaitley could bring some cheer to Keralites. 

•  The state's share in the Central tax kitty raised to Rs. 16,891.75 crore from Rs. 14,882 crore in the previous budget. This is 2.5% of the total allocation to states. Break up of Kerala's share in the central tax: Corporate Tax: Rs 4984.75 crore. Income Tax: Rs. 4357.96 crore. Customs duty: Rs. 2379.19 crore. Excise duty: 2486. 93. Service Tax: Rs. 2683.07 crore

• The proposal to reduce customs duty on Liquefied Natural Gas (LNG) from 5% to 2.5% would benefit ailing public sector units including FACTS, BPCL, Kochi Refineries and some private companies that make use of the fuel. It would also boost the prospects of  Petronet LNG Terminal at Kochi as more companies would come forward to use the cheaper fuel. 

• The public sector fertiliser company FACT is estimated to save Rs. 4 lakh a day in the LNG expense, which is using 30,000 units of the fuel a day.

• The NTPC's sick power plant at Kayamkulam has long been trying to replace the expensive naphtha with LNG. Once the plant shift to LNG, which is expected shortly, the state, which is the leading consumer of the power generated from the plant, would benefit by the lower price. 

• Almost all of the private sector companies in Kerala would benefit by the proposal to reduce the corporate tax rate for MSMEs with an annual turnover up to Rs. 50 crore to 25% from 30%. This change in the corporate tax structure would be an incentive to most Kerala corporates that come in this bracket. 

• Union Budget 2017
• Kerala
• Thomas Isaac
• Arun Jaitley
• Pinarayi Vijayan
• LNG