Kerala budget writes off interest on small farm loans

ThiruvananthapuramWith an eye on Lok Sabha polls, Congress-led UDF government in Kerala today unveiled people-friendly budget proposals for 2013-14 enhancing social security pensions, raising retirement age and offering sops for farmers including an interest waiver.

It also seeks to mop up additional revenue of Rs. 1,138.33 crore, mostly from luxury items. Cigarettes and liquor, among other things, will attract higher taxes.

In a significant announcement, the budget proposed to raise the retirement age of government employees, joining the service from April this year, to 60. The retirement age of existing staff is 56.

Announcing a set of flagship schemes for protection of farmers, Finance Minister K M Mani set apart Rs. 50 crore for writing off the interest on small farmers and announced an interest-free loan scheme for farmers holding below one hectare of land through co-operatives.

In his budget presented to the state assembly, Mr Mani also came out with a risk insurance on farm loans guaranteeing that in the event of the farmer's death the loan need not be repaid.

Claiming the prices of essentials would not be affected on account of changes in the GST on items specified in the budget, Mani proposed to raise the Goods and Service Tax(GST) on products such as vehicles and a range of consumer goods, that now attracts 13.5 per cent, had been raised to 14.5, seeking to net Rs. 650 crore.

He said the measure would bring the tax rate in Kerala on par with other southern states and that the common people would not be affected as basic items such as rice had been exempted.

Two other key sources of additional income that the budget targeted were, increasing tax on cigarettes from 15 to 20 per cent, anticipating revenue of Rs. 120 crore, and that on foreign liquor from 100 to 105 per cent expecting extra revenue of Rs. 250 crore.

Seeking to help cardamom auctioneers in Kerala, the VAT on their trade had been reduced to two per cent from five per cent. This would benefit only those who conducted auctions in the recognized centres of the spices board.

The minister also rationalised various fees on land registration and transactions anticipating cornering Rs. 200 crore.

The budget estimates for 2013-14 show revenue receipt of Rs.58,057.88 crore and a revenue expenditure of Rs. 60,327.85 crore. After taking into account factors like capital expenditure, public debt servicing and concessions and relaxations, the budget shows a deficit of Rs. 526.54 crore.

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