No cut in borrowing limit on account of KIIFB this year: State can borrow Rs 3140 crore more

THIRUVANANTHAPURAM: The cut in Kerala's credit limit imposed by the central government on account of KIIFB loans has been cancelled this year. With this, the state can borrow 3140 crores more this financial year. This will help the government to pay at least one instalment of social welfare pension arrears during Christmas.

The central government withdrew the action after the state approached the Supreme Court against the excessive cut in the loan limit. The petition alleges that Kerala's borrowing limit has been reduced by including the debt taken by KIIFB. Treasury investment is also considered a liability of Kerala. According to the petition, the amount collected by the pension company for paying the welfare pension has been made a liability of Kerala, resulting in a shortfall of Rs 26,000 crore in the loan. The Centre's withdrawal came after the Supreme Court accepted the petition on file. The Centre had decided to deduct Rs 3140 crore from the state's general borrowing limit every year for three years on account of the Rs 9400 crore loan taken by KIIFB.

6471 crores more can be borrowed

The borrowing limit of states is 3% of gross domestic product. The total production of Kerala is 11 lakh crores. Considering this and an additional loan of Rs 4,500 crore on account of power sector reforms, Kerala's proper credit availability is Rs 36,940 crore. Centre sanctioned a loan of Rs 26,931 crore after deducting Rs 10,009 crore including it as due from KIIFB and treasury loans. Of this, 21800 crores were taken by November. Of the remaining Rs 1500 crore was taken two weeks ago and Rs 2000 crore this week. Only the remaining 1631 crores could be borrowed till March next year. With the relaxation of 3140 crores and 1700 crores in the name of NPS, an additional loan of 6471 crores can be taken.