No more loans left to take; 26000 crores needed in March

THIRUVANANTHAPURAM: Kerala is borrowing the last amount of the state's borrowing limit before March, the end of the financial year. The remaining amount of Rs 1920 crore will be borrowed on Tuesday. This amount will be used to pay salaries to employees and pay welfare pension instalments. The government was shamed when salaries were delayed on March 1 last year. The last loan is being taken early this year to avoid that.

Rs 26,000 crore was required last March for the total expenditure. The state government had to approach the Supreme Court against the centre at the end. Things will get complicated if the central government does not give permission to take a loan this time too. The state government had asked for a special package of Rs 24,000 crore in the central budget, but the centre did not allow it.

For the past few years, many benefits, including dearness allowance and dearness relief, have been withheld from government officials and pensioners. Six installments of dearness allowance and dearness relief are outstanding. The arrears of the last salary revision have not been paid. An order was issued to pay the fourth instalment of the last pension revision to the pensioners, but the money has not been received.

Even when the crisis is so severe, the salaries of the PSC chairman and members have been increased by more than one lakh. The salaries of the pleaders have also been increased.

The Centre has earlier promised to allow a loan of 0.5% of the gross domestic product for power sector reforms. If that is allowed, Kerala will get Rs 5,500 crore.

A loan of about Rs 10,000 crore can be taken based on the reserves in the treasury. The Kerala government is trying to find money for the expenditure above that. It is hoped that the money will be found through tax revenue, reserves in government-affiliated institutions such as universities, local bodies, public sector undertakings, including pension funds, and additional loans from the contributory pension fund. Even so, things will not move smoothly without the Centre sanctioning loans.

Expected expenditure for March

(Amount in crores)

Salary pension.................................. 5689

Social pension............................... 820

Loan installments, interest................................ 6200

Arrears of contractors................................ 3000

Daily requirement.................................. 4000

Plan fund................................................ 7500

Total.................................................. 26000