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Kerala on way to achieving fiscal targets

‘Right time to forge ahead with fiscal consolidation’


The State Government is hoping to achieve fiscal targets according to the revised roadmap for fiscal consolidation.

“We are right on track in respect of fiscal deficit/gross State domestic product (GSDP) and debt/GSDP,” according to an official document tabled in the State Assembly.

The Medium Term Fiscal Policy and Strategy Statement for 2012-13 was presented to the House along with the Budget on Monday.

Efforts for fiscal consolidation have resumed with the amendment of Kerala Fiscal Responsibility Act 2003.

It incorporates fiscal targets to be achieved according to the revised roadmap for fiscal consolidation.

Fiscal consolidation is the joint responsibility of the Centre and the States towards putting the nation in a sound macro economic footing for stable development.

This is the right time for the State to forge ahead with fiscal consolidation, the document notes.

This is especially so given that the State’s resources in 2011-12 are estimated to post an unprecedented growth of 27.74 per cent. The revenue collection will be consolidated further in the coming years. Unlike in 2011-12, there will be moderation in revenue expenditure either due largely to the non-recurrence of arrear payments from 2012-13.

Even amidst a lot of pressure on the payment side in 2011-12, the capital expenditure is likely to book a growth of 43.58 per cent.

This is a positive development. “I hope that this momentum will be sustained, going forward,” the Finance Minister, Mr K. M. Mani said.

“I know that the fiscal correction path is not easy to tread considering the uncertainties in the global economic environment,” he said.

The interconnectedness to the rest of the world through trade and finances made the situation more complicated.

“But I have deep faith in the State’s capabilities on the revenue front,” the Minister said.

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Posted by on Mar 22 2012. Filed under Kerala News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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