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<keyword id="19896018" type="General" weightage="20" keywordseo="kerala" source="keywords">Kerala</keyword> Chief Minister <keyword id="19901169" type="General" weightage="20" keywordseo="pinarayi-vijayan" source="keywords">Pinarayi Vijayan</keyword> on Thursday said that the cess and surcharge levied by the Centre was showing a "rising trend" and resulting in "shrinkage" of states' share in the divisive pool of taxes. Vijayan said the rise in surcharges and cesses, which are not included in the divisive pool, was happening at a time when the <keyword id="20015455" type="General" weightage="100" keywordseo="finance-commission" source="keywords">Finance Commission</keyword> has been recommending a higher share for the states from the net proceeds of the taxes collected by the Centre. Vijayan was speaking at a conclave of five non-BJP-ruled states organised by Kerala to discuss the key issues related to the 16th <keyword id="25455" type="General" weightage="20" keywordseo="finance" source="Orion">Finance</keyword> Commission. He said that the 16th Finance Commission needs to factor in this rising trend in surcharges and cesses, when it recommends the prescribed share of the states from the net proceeds of taxes collected by the union government. The CM further said that the share of the states in the divisive pool needs to be increased further from the 41 per cent recommended by the <keyword id="23137017" type="General" weightage="20" keywordseo="last-finance-commission" source="keywords">last Finance Commission</keyword>. He said that Kerala and many other states have made this demand in the past with the southern state suggesting that it be increased to 50 per cent. "The demand for a higher share for the states in the taxes collected by the Union is having continued relevance and it is my request to the eminent scholars and colleagues who are here to formulate this in a concrete manner," Vijayan said. "This will help the states to make an effective case before the 16th Finance Commission for raising the share of taxes which are distributed to the states, in view of the widening vertical fiscal Imbalances."

Rise in cess, surcharge shrinking states' share in divisive pool of taxes: Kerala CM

The complete list of Chief Ministers in India for 2024

In the wake of shortage of funds, <keyword id="28504" type="General" weightage="100" keywordseo="kerala" source="Orion">Kerala</keyword>'s <keyword id="25455" type="General" weightage="80" keywordseo="finance" source="Orion">Finance</keyword> Department has capped <keyword id="6374832" type="General" weightage="80" keywordseo="treasury" source="Orion">Treasury</keyword> payments in the first month of the new fiscal. In its directive to the <keyword id="114127" type="General" weightage="50" keywordseo="treasuries" source="Orion">Treasuries</keyword> Director, the Department asked for the reduction of the ways and means limit from Rs 1 crore to Rs 25 lakhs with immediate effect. If there was a requirement for any payments to be made above Rs 25 lakhs, then special sanctions will have to come to effect. Till April 25, the Treasuries were allowed to pay bills up to Rs 1 crore. According to informed sources, the decision comes as the Kerala government is on a borrowing spree and is done to pay the salaries and pension to state government employees, besides paying of interests on earlier borrowed loans. Kerala appears to have gone 'broke' is on account of a delay in sourcing funds, they added. If borrowed funds do not return on time or if the GST compensation to the state does not come in time from the Centre, then the salaries and pensions to be paid in the first week of May might not happene. When the economist turned Minister of Finance, Thomas Isaac was at the helm of affairs during the first <keyword id="6356705" type="General" weightage="50" keywordseo="pinarayi-vijayan" source="Orion">Pinarayi Vijayan</keyword> government (2016-21), he deftly managed the poor state of finance through proper fiscal management and now with first-time legislator K.N.Balagopal as the Finance Minister, things appear a bit tough. Incidentally the total outstanding public debt of Kerala had skyrocketed after Vijayan took over and it now stands at above Rs 3 lakh crores. Outstanding debts is the sum total of public debt which consists of internal debt, loans and advances from the Centre besides loans from financial institutions such as LICA and special securities and not to mention of borrowings from deposits in state PF, treasury, pension funds and insurance. To get a clearer picture of the debt, it is best highlighted as a ratio of the size of the state economy/state gross state domestic product (GSDP). A comparison of the national picture of states and union territories with the highest debt GSDP ratio in 2022 are Arunachal Pradesh 57.4 per cent, Jammu and Kashmir Kashmir 56.6 per cent, Punjab 53.3 per cent, Nagaland 44.2 per cent, Himachal Pradesh 43.4 per cent, Rajasthan 39.8 per cent, Meghalaya 39.2 per cent, West Bengal 38.8, per cent Kerala 38.3 per cent and <keyword id="37102" type="General" weightage="50" keywordseo="andhra-pradesh" source="Orion">Andhra Pradesh</keyword> 37.6 per cent. One thing which has to be noted is the present staggering figure of the outstanding debts of Kerala did not happen overnight and successive state governments to a certain extent can take credit for the achievements of the state in the fields of education and health, which leads the rest of the country and to reach here, investment is required, but looking deeper into it experts revealed the real situation. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/investment/news/telegram-users-can-now-send-crypto-payments-to-each-other/articleshow/91170010.cms">Telegram users can now send crypto payments to each other</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/ongc-is-hiring-over-3600-apprentices-with-a-maximum-stipend-of-9000-per-month/articleshow/91169869.cms">ONGC is hiring over 3,600 apprentices with a maximum stipend of ₹9,000 per month</a>

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Rise in cess, surcharge shrinking states' share in divisive pool of taxes: Kerala CM

PTI

The complete list of Chief Ministers in India for 2024

BI India Bureau

Kerala government caps treasury payments in the wake of fund shortage

IANS

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