No money to celebrate Christmas; Kerala government in a fix

THIRUVANANTHAPURAM: The state government has now crossed the borrowing limit set by the central government. As per reports, no further loan will be allowed to the state which casts a dim shadow over the government's yearly Christmas / New Year celebrations

There is no custom to pay bonuses ahead of the Christmas season but there is a practice for the government to pay welfare pension arrears before the start of every Christmas season. As of now, four months of arrears are to be paid. Even to pay two months of arrear money, the government requires Rs 1800 crores.

In the last quarter of the financial year starting in January, the state will be able to borrow 5131 crores. The state has sought permission to take Rs 2,000 crore from this in December. However, the state has already taken Rs 1500 crore for various purposes making further borrowing impossible.

In the meanwhile, the government tried to bring more money from KSFE, Beverages Corporation and other organizations with better financial conditions but failed.

The government has asked to transfer about Rs 5,000 crore to the treasury, which is the reserve investment of the public sector institutions in the state. If it is received, it is known that two instalments of welfare pension may be paid by the end of December.

Three per cent of the gross domestic product can be borrowed. It will be around 32000 crores. Apart from that, Kerala is asking for one per cent additional loan approval considering the financial crisis. If it is allowed, Kerala will get about 11000 crores.

But Union Finance Minister Nirmala Sitharaman said the centre won’t be able to give special allowance to Kerala while all other states have only three per cent loan approval. At the same time, there is no obstacle for Kerala to take loans or organize money in other ways. Taking that into consideration, the government may try to bring funds from public sector institutions.