Thiruvananthapuram: The Kerala government is planning to increase the fees for all the services it provides to the public, as it looks at ways to overcome the economic impact of the COVID-19 outbreak.

According to sources, the recommendation to increase the fees will be one of the key proposals of the committee headed by K M Abraham, which was appointed by the state government to provide guidelines on ways to increase revenue and decrease costs.

Most of the state’s expenditure is in the health and education sectors. The committee is likely to tell the government that it should focus on improving revenue from these two sectors. The government, acting on the recommendation, could increase the price of out-patient tickets at hospitals by up to 50 per cent.

The KM Abraham Committee will come out with its interim report this week and submit it to the government. It will take into account the reports of the Gulati Institute of Finance and Taxation (GIFT) and the State Planning Board on the loss suffered by the state due to the COVID outbreak, and the report of the Centre for Development Studies (CDS), Thiruvananthapuram, on cutting expenditure.

GIFT, which is an autonomous institute of the state government, has estimated that Kerala's revenue deficit may increase to Rs 48,657 crore and fiscal deficit may go up to Rs 62,751 crore in FY21 as a result of the direct impact of COVID-19.

Recommendation to increase fees has been made earlier, too

Thiruvananthapuram: This is not the first time that the state is being told to increase the fees on public services.

A committee headed by the finance secretary had also made the suggestion four months ago. Now, the KM Abraham Committee is also likely to make the same recommendation.      

With the advent of the Goods and Services Tax (GST), which came into force in 2016, the state has lost the authority to increase taxes on most products. 

The only way it can shore up its revenue is by increasing non-tax earnings. 

The government had recently decided to increase the sales tax on liquor by 10-35%. It has also increased the prices of lottery tickets. It had, however, not increased the fees of public services in the Budget. That is the reason it is thinking of hiking the fees now.

The state is also considering a proposal to increase revenue by offering self-financing courses through government colleges.

Many of the Abraham Committee’s recommendations are not likely to be new. They will mostly reflect what many committees have said in the past: no new purchase of vehicles, control the expenditure on perquisites and benefits of government employees, increase the age for pension, shift the additional employees at the secretariat to other departments, and reduce the number of posts in the government.