To celebrate Onam grandiosly, Kerala seeks central approval to borrow Rs 6,000 crore

THIRUVANANTHAPURAM: Kerala Finance Minister K.N. Balagopal met Union Finance Minister Nirmala Sitharaman in Delhi and requested that the state be allowed to borrow an additional Rs 6,000 crore to celebrate Onam next month. He also requested that the amounts previously withheld be returned.

In the meeting, Minister Balagopal clarified that the state is not moving forward by borrowing excessively and relying too much on the Centre. The ratio of debt to GDP has come down from 38.47 per cent in 2020-21 to 34.13 per cent, and the Centre's share has come down from 44 per cent to 25 per cent. 75 per cent of the state's expenditure is met from its own revenue. He also said that it is not fair to withhold the state's due share in this situation. 6165.72 crores have been withheld over matters not Kerala is directly responsible for. The additional cost of 6000 crores that Kerala had to pay for national highway development should also be recovered.

The central government had earlier agreed to allow a loan of Rs 1877.57 crore to correct an error made when calculating the state's gross domestic product and the previous year's borrowing limit based on it. However, the loan was later not approved. Kerala had requested a total of Rs 12165.73 crore.

For Kerala, the financial obligations are long. There are two instalments of welfare pension due. If one of them is to be distributed during Onam, Rs 1600 crore is required. There are expenses such as a bonus of Rs 4000 for government employees, a festival allowance of Rs 2750, a pension relief of Rs 1000, an Onam advance of Rs 20000, allowance for contingent employees of Rs 6000. The government is facing huge expenses such as civil supplies subsidy, distribution of benefits due to socially disadvantaged groups, distribution of Onam kits, and packages to stimulate the market. Out of the loan of Rs 29529 crore sanctioned till December, Rs 17000 crore has already been spent.