Financial crisis in state: salary split in two installments and deduction if Centre continues borrowing ban

THIRUVANANTHAPURAM: The government is planning to split the salaries of employees in two installments if the financial crisis worsens as the Centre denied permission to borrow. The salaries of the Secretariat staff will be the first to split in two installments. The government is also considering to withhold a fixed percentage of the salary and pay it back when the crisis is over. This is a way of overcoming the financial crisis in the United States and many other places.

At the same time, the government began trying to raise money from co-operative banks and state financial institutions to handle the situation.

Treasury control will be tightened until the crisis is over. At present, there are restrictions for bills above Rs 25 lakh. The state has a revenue of Rs 11,000 crore and expenditure of Rs 13,000 crore. Although the financial crisis is not severe, if the loan defaults, the cash flow will go awry. That is what causes the crisis. The condition will worsen if the Centre continues its stand or the decision is delayed.

It is a matter of serious concern that the loan has not been approved although it's been two months since the financial year has started. Last month, the state tried to borrow Rs 1,000 crore and this month Rs 3,000 crore. That is why permission was denied. It is believed that Centre's decision is not influenced by political stand. Permission was granted to Maharashtra, Andhra Pradesh, Punjab, Jammu and Haryana. It is expected that Kerala will also get it soon. Kerala can borrow 3.5 per cent of GDP. That is Rs 32,425 crore. The total debt is Rs 3,02,620 crore.