Union Budget shows signs of likely recession, says Kerala FM

Thiruvananthapuram, Feb 3 (PTI) The Union Budget presented by the Union Finance Minister shows an alarming tendency, indicating that the economy is probably heading towards a recession, Kerala Finance Minister K N Balagopal said here on Tuesday.

Speaking exclusively to PTI Videos on the sidelines of a function where he gave a comparative analysis of the Kerala State and Union budgets, Balagopal said that the total revenue receipts of the Central Government had shown only a marginal increase of Rs 1 lakh crore this year, which represents growth of less than three per cent.

"The Union Budget shows a tendency towards recession. Though an economic slowdown has not been announced, there are signs that the economy is heading towards a slowdown. This is a matter of great concern. Last year, the total revenue receipts of the Union Government were Rs 38 lakh crore, and this year they have increased by just one lakh crore, which is less than three per cent growth," Balagopal said.

He said that the annual growth in revenue receipts usually exceeds three per cent.

"Some of the estimates that we have included in the Budget may not be achieved. In such a scenario, next year the Union Government will receive the same revenue receipts as it has this year. When that happens, it means the receipts will decline in real terms," Balagopal said, indicating a probable slowdown in the Indian economy.

He said that the Union Budget had reduced funds across all sectors.

"They have reduced Rs 58,000 crore in MGNREGA alone. Funds have also been cut for school education and health, as well as diesel and petrol subsidies for pumps," Balagopal said.

The Kerala finance minister said that the Union Government had even failed to disburse the funds allocated for projects in the previous Budget.

"For the Jal Jeevan Mission, they allocated Rs 67,000 crore last year, but only Rs 17,000 crore was released. When they did not pay us for the implementation of this project, we had to borrow Rs 5,000 crore, as the contractors were not receiving payments," Balagopal said.

He reiterated his concerns over the possible recession scenario, saying that Kerala cannot insulate itself when the Indian economy is heading towards a dangerous situation.

"World politics is in a strange situation. We cannot sit alienated as the policies of the Central government will affect us as well. The policies of the Indian Government are going to destroy our economy. We have made victims of the tariff war of the US, when it tries to reign its supremacy in the world," Balagopal said.

Accusing Prime Minister Narendra Modi of working to keep US President Donald Trump happy at the cost of the happiness of the Indian people, he said that the United States was dictating terms to India through tariff deals.

The US is dictating to us that we should buy their products at prices they quote, sell our products to them at prices they decide, and sell our products in our own country with taxes they determine," the Finance Minister said.

He said that India undertook GST restructuring only after Trump spoke disparagingly about the Indian economy.

"Donald Trump had earlier said that both India and Russia had bad economies, and it was after that remark that India went in for GST restructuring. In the month before the restructuring, total GST collection in India was Rs 2.3 lakh crore per month.

"In the month after the restructuring, it came down to Rs 1.72 lakh crore per month -- a reduction of Rs 60,000 crore in a single month," Balagopal said, adding that these were the reasons why there had been no increase in the revenue receipts of the Central Government.

He also pointed out the danger of the free import of products such as milk into India from countries like Australia.

"A friend of mine from Australia, who is familiar with the dairy sector, told me that if India imports milk from Australia, it can be sold here at Rs 26 to Rs 28 a litre. There are more than 10 lakh farmers here who depend on dairy farming, and this could affect them very badly," he added.

The Kerala FM also said that despite the State Government putting forward several demands, including demands for industries, especially in sectors such as defence, the Union Budget had completely ignored the state. PTI KPK TGB ADB