Kerala rooting on central govt to solve state's Rs 26,000 crore monthly expenditure crisis

THIRUVANANTHAPURAM: The state is rooting on CM Pinarayi Vijayan’s amicable meeting with Union Finance minister to help overcome the struggle brought by the financial year end expenditure. The state is facing a huge shortage in the expenditure money of Rs 26000 crore for March. If at least 12000 crores are not allowed to borrow, things will get complicated. Last year, the expenditure in March was Rs 24000 crores.

The surprisingly positive meeting CM Pinarayi Vijayan had with the union finance minister inside the Kerala house in Delhi provides hope for the state. The state can borrow three percent of its gross state domestic product. Accordingly, the amount that can be taken is Rs 38237 crores. With the approval of an additional loan of 4000 crores for the increased expenses during the Onam season, a total of Rs 42237 crores has been taken out so far.

Now, 0.5% of GSDP can be borrowed for reforms in the electricity sector. For this, the state had taken over 90% of KSEB's last year's loss, amounting to Rs. 494 crores. This will permit the state to borrow around Rs 5800 crore. The state is demanding special permission to borrow more.

The central government has imposed strict restrictions on borrowing by states like Punjab, Himachal Pradesh, West Bengal, and Kerala, the largest borrowers in the country.

Currently, Kerala is going beyond the prescribed limit. Amidst these financial woes, more money is demanded in the name of Social Security Pension Company and KIIFB. If the state is unable to repay the loan taken, it will become the liability of the central government as per the law. Citing this reason, the central government is apprehensive when it comes to allowing a loan for Kerala.