Kerala finance minister Mani presents white paper

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The white paper presented by the finance minister, Mr K.M. Mani, on Tuesday paints a dark picture of the state’s financial situation and lays the blame on the previous Left Democratic Front government.

It shows an additional financial liability of Rs 10,197 crore, inherited from the previous government, but it comes off as more of nitpicking, given the record of the two major coalitions in Kerala.

Mr Mani said that against the liability component, only Rs 5,133 crore was provided in the budget to defray expenses on account of pay and pension revision and the arrears of the anti-recession stimulus package, announced by the previous ministry.

The paper highlighted the unproductive expenditure and lapsed Central assistance. The public debt level of the state stood at Rs 78,673 crore by the end of the last fiscal, it said.

However, the outgoing Ministry had left a treasury balance of Rs 3,882 crore on April 1, 2011. This too after managing the financial situation without recurrent overdraft or treasury closure for the past five years.

But Mr Mani doesn’t agree. He is not impressed by the cash balance retained in the treasury and says it in effect adds to the liability of the State.

In simple terms, this means the treasury having to keep money-PF and other assets- that carries an interest burden. Again, the assets are not available for deployment.

Former finance minister T.M. Thomas Isaac, who is the ‘villain’ of the white paper, calls this rather a crude analysis because there were times when even such costly liquid assets were not available in the government kitty.