Mani, Isaac differ over treasury position

THIRUVANANTHAPURAM: Finance Minister K M Mani has said that the balance the LDF Government claims to have left in the treasury will not be enough to meet even a miniscule portion of the government’s commitments. Former Finance Minister T M Thomas Isaac, on the other hand, said that the LDF Government had paid up all arrears and any new commitments could easily be met if the present buoyancy in tax collection was sustained.  Mani told reporters here on Wednesday that whatever was left in the treasury would be wiped off once the pay revision commitments were met. The Finance Minister, however, refused to elaborate on the point saying that he would come out with a ‘white paper’ on the state’s finances along with his budget speech on July 8. He refused to confirm former Finance Minister Thomas Isaac’s earlier statement that the treasury had a balance of Rs 2,000 crore. Isaac had said that such a huge balance would ease the pressure on the new UDF Government as they need not have to go for any loan to meet day-to-day expenses. While Isaac claimed that the state’s financial situation was stable, Mani believed otherwise and had announced right after taking over that he would come out with a ‘white paper’. Isaac’s stand is that, unlike when the former UDF Government vacated power in 2006, the LDF had cleared all arrears. Mani, while silent on arrears, speaks of future commitments. For example, the over Rs 5,000 crore committed to road development as part of Isaac’s anti-recession package. Only Rs 1,000 crore had been sanctioned. The bills for the rest will start coming in during the coming five years.  The former Finance Minister’s tenure was marked by a huge push in capital expenditure. The last fiscal, 2010-11, saw a massive 300 per cent hike in capital expenditure. For financing such huge capital outlay, Isaac had banked on a buoyant tax collection. During the last two years, especially after the implementation of VAT, tax collection grew between 20-25 percent. ‘’A state with such a huge tax buoyancy need not worry about future commitments,’’ Isaac said.