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March 14, 2000
Kerala flays Sinha, allocates Rs 390 million for food subsidy in its Budget
Kerala's Finance Minister T Sivadasa Menon today said that Rs 390 million had been earmarked in the state budget to meet additional commitment if the central government does away with the subsidies on the public distribution system or PDS commodities as announced in the Union Budget.
Presenting his fifth budget to the state legislature, he said the Centre's decision would have serious implications on a state like Kerala that depends on the PDS for food security.
He hoped that better sense would prevail in the light of voices raised by well-minded citizens against the Centre's efforts to economise at the expense of the poor and the deprived.
Menon said the Centre would give 20 kg of rice at subsidised rates under the 'targeted' PDS to only 25 per cent of the state's population, though 42 per cent were living below the poverty line or BPL. This means the state government should take upon itself the responsibility of subsidising the 20 kg of rice to 17 per cent of those living below the poverty line.
He said if the Centre persisted with its misguided policy, the state was committed to maintaining food security despite the fact that the financial implication to achieve this without the central help was daunting. "We are committed to keeping the 42 per cent of our population, who are below the poverty line, within the PDS by giving the entire 20 kg of grains announced by the Centre at the ration price itself," he asserted.
Besides, the state would continue the one rupee per kg subsidy on 16 kg of rice for all the ration card holders, irrespective of their economic status, he added.
Menon said hardly any sector had been given a boost in the Union Budget. He said there was a 'regressive movement' towards a tax regime that preserved and protected the interests of a small fraction of the population that owned 80 per cent of the total wealth of the country.
"One sees a very dismal picture of the economy in the central Budget as a rudderless boat, cut loose from its anchor and left to the vagaries of the weather," he said.
"The focus of the central Budget in fiscal management lay in two retrograde directions: the first in reducing subsidies for the poor under the guise of 'targetting' them and the second in frittering away the precious wealth of the nation under the camouflage of divestments," he stated.
The country's financial managers have totally ignored the extent of tax evasion and avoidance prevalent in the country, he said.
Menon said the lowering of the customs duty and hiking of the excise duty in the Budget would strike at the roots of the state's indigenous manufacturing sector and widen the trade deficit, apart from inducing strong inflationary trend in the economy.
"The emphasis seems to be on bringing in more tax-payers within the tax net. The approach seems to be targeted at the middle class, and turns a blind eye to the pattern of concentration of wealth in the country," he alleged.
Menon also announced the following relief measures in his Budget for Kerala:
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