Salary revision: Kerala government needs to borrow Rs 60,000 to meet liabilities

THIRUVANANTHAPURAM: The state has to borrow almost twice as much as in the previous financial year to keep up with the salary revision liability following the recession caused by Covid. During the first six months of the current financial year, loans amounting to Rs 37,784 crore were taken for salaries and other expenses. According to the current financial report, another Rs 23,000 crore will have to be borrowed. The total debt on this item is at least Rs 60,000 crore. According to the report, this is due to the creation of more posts, appointments and salary revisions.

The total borrowings during the last financial year stood at Rs 38,190 crore, despite a halt in revenue and a sharp rise in social welfare and health expenditure. The government has to borrow close to that amount in the first half of this fiscal year, when the Covid impact waned, the economy improved and the trade sector showed signs of recovery.

The finance ministry estimates that the surcharge on wages and pensions has pushed up the state's revenue expenditure. From April to September this year, Rs 28,684 crore was spent on salaries and Rs 14,601 crore on pensions. Last fiscal, the government spent only Rs 28,763 crore on salaries and Rs 18,943 crore on pensions. It is expected to spend 90 per cent more this year than the previous year.

Current economic situation of the state

Rs 28575 crore tax income from April to September 2021

Revenue expenditure including salaries and pensions was Rs 86570 crore

The fiscal deficit is Rs 37783 crore

Revenue deficit 30282 crore

The total debt of the state during the current financial year is Rs 3.27 lakh crore