Second Pinarayi govt’s first full budget today, will there be a tax rise?

THIRUVANANTHAPURAM: The first full budget of the second Pinarayi government will be presented by Finance Minister KN Balagopal in the Assembly today. The budget will be presented at 9 am.

Measures may be taken in the budget to increase tax and non-tax revenue. The finance minister has indicated that restrictions will be tightened to reduce expenditure. Taxes may be increased on liquor and vehicles, which generate the most tax revenue. Allocations for welfare schemes may also decline in the wake of the financial crisis.

Raising fees for government services, land taxes and the fair value of land are also under consideration. It is estimated that after the implementation of GST, the state's tax revenue is declining by about Rs 20,000 crore every year. It is expected that the Centre will pay GST compensation this year as well.

The bigger challenge is to raise revenue rather than reduce costs. Revenue plummeted during the floods and Covid time. Costs soared. The goal is to bridge this gap. The emphasis will be on awakening including in the manufacturing sector.