Financial crisis intensifies in state; needs Rs 5000 crore for Onam allowance

THIRUVANANTHAPURAM: The state which is facing severe financing crisis due to Central government's decision to cut off borrowing limits, needs Rs 5000 crore to pay salaries, pension, bonus, advance and festive allowances during Onam. The government is likely to borrow for this.

The Centre has only allowed borrowing of Rs 17,936 crore for the nine months up to December. Even now, Rs 2000 crore borrowing is caused every month for salary and pension. Within nine months, it will become Rs 18,000 crore.

Apart from this, an Onam borrowing of Rs 5000 crore is required. In view of this, the government expenses during Onam will have to be cut down.

The only relief is that there is no need to pay advance salary as Onam is on September 8. Meanwhile, Rs 2300 crore is required for welfare pension distribution for the months of July, August and September, which cannot be missed during Onam.

Although the state wrote a letter to the Centre seeking permission to increase borrowings, a favourable response was not received. The Centre's decision to include all the debts which are from outside the budget like special projects, government guarantees or revenue liabilities, under the public debt caused a backlash to the state.