Kerala fears revenue will drop by half due to demonetisation

Thiruvananthapuram, Nov 17 (IANS) Eight days after demonetisation, Kerala State Finance Minister Thomas Issac said the the state’s revenue would drop by half, but that payment of salaries would not be affected.

Speaking to reporters here on Thursday, Issac said the employees’ salaries would be paid on time as the state treasury is linked to top core banking facilities, which enables transfer of money to their bank or treasury accounts.

“Overall, we expected a 19 per cent growth in revenue collections, but now it’s not going to be achieved and instead from Rs 4,000 crore it will come down to Rs 2,000 crore,” said Issac.

“There has been a drop in collections at the state-run Kerala State Financial Enterprises, registrations besides sales of lottery tickets. It will take time to know the impact of the tax remitted by the petroleum companies,” he said.

Meanwhile, people continue to stand in queues in front of ATM kiosks and banks, which have now started to mark customer’s index finger with inedible ink to prevent their repeat withdrawals of cash and exchange of old currency notes.

“I have no problem in the ink being spread on my fingers as we are fighting the evils of accumulation of black money,” said a middle-aged man at a bank here.

Chief Minister Pinarayi Vijayan met top banking officials on Thursday in the state and discussed ways to make life easy for all in the wake of demonetisation.

“The plantation sector is in trouble but we have asked banking officials to allow estate owners to transfer wages to accounts of the District Collectors, who will see that the payment of wages is streamlined,” said Vijayan.

“The officials have also agreed to install more ATMs en route to Sabarimala temple and the treasuries will also open new outlets to ensure pilgrims get enough money,” he added.

The Congress-led opposition is observing a black day on Thursday, the party workers wearing black badges and the top leadership holding a sit-in in front of the Accountant General’s Office here to protest Prime Minister Narendra Modi’s rather quixotic move to tackle black money.

Meanwhile, officials began taking stock from jewellery shops in the state on the purchases made by people after the demonetisation decision was announced on November 8.

A detailed list is being prepared of the purchases made by the people and the accounts of these jewellers are being looked up. Footages of CCTVs installed at such shops are also being examined.

Vellapally Natesan, the powerful Hindu Ezhava leader and patron of the Bharath Dharma Jana Sena (BDJS) — a newly floated political outfit and an ally of the NDA in Kerala — welcomed the demonetisation decision.

“This is a huge step taken to tackle ‘financial terrorism’ and the manner in which it was kept a closely guarded secret is worth applauding. Through this, there would be a cleansing of the financial system in the country,” said Natesan.

Meanwhile, in a first of its kind move, the ruling Left Democratic Front (LDF) and the Congress-led opposition have decided to work together as the Centre has totally ignored the pleas of cooperative banks in the state to allow them also to function like other commercial, scheduled and private banks in the state.

“A decision will be arrived on this after the all-party meeting is held on Monday,” said Leader of Opposition Ramesh Chennithala.