T’puram: Former finance minister K N Balagopal has said that the state had expected to receive a substantial Revenue Deficit Grant (RDG) when the 16th Finance Commission submitted its report, adding that the denial of the grant has affected the state’s financial calculations.Balagopal said that if grants had been allocated to states following the pattern adopted by previous finance commissions, Kerala should have received more than Rs 40,000 crore as RDG over a five-year period. He noted that the 15th Finance Commission had allocated around Rs 4.5 lakh crore as RDG to various states. Adjusted for inflation, Balagopal said, the 16th Finance Commission should have distributed at least Rs 6 lakh crore among states under the same head.According to Balagopal, the state govt had prepared its budget and the legislative assembly had approved it after taking into account the expected grant. The state had estimated that Rs 14,138 crore would be received as the first instalment during the current financial year. However, Centre did not provide a RDG this time, he said.He said the decision had disrupted the financial planning of several states. Referring to Himachal Pradesh, Balagopal said the Congress-led state had passed a resolution in its assembly seeking restoration of the RDG. He added that the Himachal Pradesh chief minister had travelled to Delhi to register a protest with Centre and had warned that the state might have to reduce employee salaries if the grant was not restored.Balagopal said Kerala should treat the issue with seriousness. He pointed out that the action taken report on the recommendations of the 16th Finance Commission has not yet received final approval from Centre and therefore the possibility of securing a RDG still exists.He urged the state govt to initiate discussions with Centre to obtain the grant and expressed hope that the state budget would contain strong measures aimed at securing the RDG for Kerala.
