Change in employment guarantee scheme to impose Rs 2K crore additional burden on Kerala: Minister K N Balagopal
THIRUVANANTHAPURAM: Kerala Finance Minister K N Balagopal has stated that the recent changes introduced by the Central Government in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) will impose an additional financial burden of Rs 16002000 crore annually on the state. Currently, the Centre bears 90 per cent of the schemes expenditure. With the contribution reduced to 60 per cent, the state will be forced to shoulder a significantly higher share. Last year, the Centre provided Rs 4838 crore for the scheme. Kerala, he noted, has been performing exceptionally well in implementing MGNREGS. Speaking while presiding over the 9th I SGulati Memorial Lecture, the Minister emphasised that frequent policy changes by the Centre in the financial domain make it difficult for states like Kerala to move forward. He described such measures as creating severe crises for the state. Congress slams Centre over MGNREGA renaming; calls move attempt to 'erase' Gandhis legacy At the national level, the Centres share of total revenue averages 53 per cent, whereas for Kerala it is only 25 per cent. Kerala faces unique challenges, being the state with the highest proportion of elderly citizens in India. Despite this, the Centre continues to impose measures that financially squeeze the state. The Minister added that Kerala has managed to sustain itself largely due to its ability to raise tax revenues. He stressed that India is a union of states, where both the Centre and states should have equal importance. However, by centralising greater financial powers, the Centre is undermining the federal structure. Delivering the memorial lecture, Professor D K Srivastava, Chief Policy Advisor at Ernst & Young, Member 12th Finance Commission, highlighted that equity in financial transfers between the Centre and states must be prioritised. He pointed out that disparities in revenue and expenditure across states remain a major challenge, and urged Finance Commissions to address this issue. While inter-state disparities are still significant, he noted that they are gradually narrowing, which is encouraging. Policy interventions, he said, are essential to further reduce these gaps. While there is fiscal equalisation in terms of outcomes like education, health, and consumption, among others, income inequality across states has increased. This has been attributed to an increase in profit-driven private investment. He called for addressing appropriate policy measures to arrest these trends. Former Finance Minister Dr T M Thomas Isaac, who moderated the session, remarked that equity must be the guiding principle in resource allocation to states. He observed that disparities in per capita income and private investment across states are widening. He added that backward states could adopt Keralas model in several areas to improve their performance. The event was organised by the Gulati Institute of Finance and Taxation (GIFT). Director Prof. K.J. Joseph delivered the welcome address. Among those present were I.S. Gulatis wife, Leela Gulati, Ajay Narayan Jha, Dr Mridul Eapen, Dr A.V. Jose, Ritin Roy, and Professor Pulin Nayak. Dr Renjith PS, assistant professor, delivered the vote of thanks. 'RAM G Bill will weaken MGNREGA,' says Priyanka, calls Modi govt obsessive over renaming
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