Amid the row over pending social security pension payments, the Finance department has observed that the cesses on Indian Made Foreign Liquor (IMFL) and petrol and diesel announced in the 2023-24 State Budget are insufficient to meet even one month’s pension payments in full.
In the eight months from April 1 to November 30, 2023 the ‘social security cess’ on petrol and diesel yielded only ₹600.78 crore and that on IMFL ₹139.92 crore, Finance Minister K.N. Balagopal informed the Assembly on Tuesday.
This was scarcely sufficient to pay even one month’s pensions to the beneficiaries, he said.
Every month, Kerala requires close to ₹900 crore to distribute the social security and welfare fund board pensions to about 62 lakh people, according to the government. The pensions for September, October, November, and December 2023 are in arrears, Mr. Balagopal said.
The liquor and fuel levies are back in the news on account of the pending payments. The Opposition United Democratic Front has slammed the government for delaying the payments despite levying the cesses. The fate of the cesses is also keenly watched as Mr. Balagopal is set to present the 2024-25 Budget on February 5.
The cesses were announced in the 2023-24 State Budget to finance a Social Security Seed Fund, with the government noting that its annual financial commitment on account of the pensions was “on the rise and reaching ₹11,000 crore per annum”.
As per this decision, a ₹20 cess is levied on every bottle of IMFL priced between ₹500 and ₹999 and ₹40 on those priced ₹1,000 and above. The government had expected an annual additional revenue of ₹400 crore from this levy. The per-litre ₹2 cess on petrol and diesel was expected to mop up ₹750 crore for the social security seed fund annually.
Mr. Balagopal, in a written reply to the House, attributed the delay in the pension payments to the Union government’s insistence that the liabilities of Kerala State Social Security Pension Ltd (KSSPL) were direct debt of the State government and the delay in receiving the Central share for the pensions.
